Oct. 20 (Bloomberg) -- Brazilian senators approved a rule that modifies the way revenue from oil exploration is divided among states and municipalities, reducing the amount of money that goes to the federal government.
The Senate voted yesterday to reduce oil royalties received by the federal government to 20 percent of revenue collected from 30 percent. Oil producing states will have their revenue reduced from 26.25 percent to 20 percent. Non-producing states and municipalities will start getting a bigger share of taxes charged on oil exploration.
Under the new legislation, states like Rio de Janeiro and Espirito Santo, which have oil exploration and production units, will get 7.43 billion reais ($4.19 billion) from oil contracts next year, compared with 8.22 billion reais this year, according to calculations distributed in a statement by Senator Francisco Dornelles to reporters in Brasilia yesterday.
The new rules are valid for oil fields that have already been auctioned and don’t alter royalties paid by companies such Petroleo Brasileiro SA, said the leader of the government coalition in the senate, Romero Juca.
The bill goes to a Lower House vote.
--Editors: Helder Marinho, Jonathan Roeder
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