The State of Rio de Janeiro started to charge in the month of May a Control, Monitoring and Environmental Policing Fee for the Activities of Prospecting, Extraction, Exploration and Production of Oil and Gas, known as TFPG.
Introduced by the State Law no. 7,182/15, the TFPG was created under the pretext of bearing the costs related to the regular exercise of environmental police power conferred upon by the State Environmental Agency (INEA), enabling the control and inspection of the oil activity in the State of Rio de Janeiro.
All legal entities authorized to conduct the activities of prospecting, extraction, exploration and production of oil and gas resources shall be subject to the referred fee.
The amount of the fee – which shall be monthly due, taking into account the production verified in the respective period – shall be of R$,2,71 per oil barrel or per extracted gas equivalent unit, which must be paid by the 10th (tenth) day of the month subsequent to the month of extraction. This value shall be adjusted on 1 January of each year according to the Fiscal Unit of Reference variation of the State of Rio de Janeiro (a statutory inflation-adjustment index - UFIR/RJ), and should this inflation-adjustment index be discontinued, the adjustment will take place by the adjustment for inflation index adopted for the state tax adjustment.
Although this law was only published in December 2015, the referred law has only been given specific regulation on April, through the Decree no. 45,638/2016.
The Brazilian Association of Oil and Gas E&P Companies (ABEP) filed at the Federal Supreme Court a Direct Action for the Declaration of Unconstitutionality (ADI no. 5,480/RJ), questioning the lawfulness of this charge. However, thus far, the Federal Supreme Court has not produced any statement about the legality or lawfulness of this charge.
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