BRASÍLIA/SÃO PAULO, May 23 (Reuters) - The Brazilian government will propose a reduction of the PIS/Cofins tax on diesel in a bid to end a nationwide truckers' protest against higher fuel prices, which is disrupting economic activity.
The protests that started on Monday are affecting transportation of goods ranging from auto-parts to animal feed to grains, disrupting industries including meatpackers, carmarkers and the delivery of goods to ports.
The proposal, to be put before Congress next Tuesday, comes as leaders floated a plan to eliminate fuel taxes using additional revenue from payroll taxes to reduce fuel prices, House Speaker Rodrigo Maia said late on Tuesday.
Since the beginning of the week, truck drivers have been staging demonstrations against a rise in fuel prices of nearly 50 percent in less than a year. They said they would extend their protest into a third day on Wednesday after considering insufficient a government proposal to reduce only the CIDE fuel tax.
ABCAM, he trucking group organizing the protests, said on Tuesday demonstrations would continue, complaining that the CIDE accounted for only a fraction of the taxes on diesel fuel.
According to state-run oil company Petroleo Brasileiro, known as Petrobras, state and federal taxes make up 29 percent of the final price of diesel paid by the consumer. (Reporting by Maria Carolina Marcello and Pedro Fonseca Writing by Ana Mano Editing by Chizu Nomiyama)