The taxation on agricultural fertilizers will see a gradual increase from 2022, according to a decision by the National Council for Farm Policy (Confaz) which was approved on March 10.

Confaz was formed by the Minister of Finance and the finance secretaries of the Brazilian states and defines concessions or revocations of tax benefits in the country.

With this decision, the Tax on Circulation of Goods and Services (state tax) on fertilizers will gradually increase from 1% to 4% from 2022 to 2025.

The decision represents an amendment to the 1997 Agreement 100, which reduces the ICMS calculation base on outflows of agricultural inputs traded between the states.

Under this agreement, the rates on other agricultural inputs, such as feed, pesticides and seeds, for example, remain unchanged.

"The renewal of the agreement occurs after a wide debate between the states and dialogue with entities in the agricultural sector, and involves a goal of growth of 35% in the production of the national fertilizer industry by 2025," Confaz stated in a release.