The government of Luiz Inácio Lula da Silva succeeded in reversing in court the first-instance decision that had suspended the collection of the Export Tax on crude oil. Judge Roberto Carvalho Veloso restored the validity of the tax, rejecting the arguments that underpinned the previous suspension.
The judge rejected the claim that the Executive branch could not issue an act to maintain the validity of the tax after the expiration of the provisional measure that established it. According to Veloso, since the Export Tax is a regulatory tax, the federal government's authority to create or modify rates precedes the provisional measure itself.
Veloso stated that the rule assigning an agency of the Executive branch of the Union the authority to modify the Export Tax rates is compatible with the Federal Constitution. The magistrate also rejected the assessment that the collection would not have an extrafiscal purpose.
The government argues that the tax was adopted to prevent subsidized fuels in the country from being exported, mitigating the effects of fluctuations in the international oil market.
