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LATAM POLITICS TODAY-Brazil's election-year tax cuts could come at a price

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* Colombian election could spark violence, police warn

* Uncertainty reigns ahead of Chile constitution vote

* Mexico's president calls violent incidents "regrettable"

* Bolsonaro vetoes dream of free checked bags for fliers

* Lopez Obrador says new refinery operational next year

June 15 (Reuters) - The latest in Latin American politics today:

Bolsonaro's election-year tax cuts could cost billions

Tax cuts in Brazil, including a cap on state taxes on fuel and other items approved by Congress Wednesday, are likely to cost the government 110 billion reais ($21.5 billion) in Brazilian tax revenue this year.

The measures are part of an effort by President Jair Bolsonaro to ease inflation and spur the economy in an election year despite economists' warnings of blowback in 2023.

Colombian officials warn of election violence

Colombia's police are on maximum alert after detecting plans by groups to reject the results of a second presidential election vote on Sunday and commit violence across the country, top cop General Luis Vargas said on Tuesday.

Colombians will go to the polls on Sunday to choose between leftist Gustavo Petro, who has vowed profound economic and social change, and construction magnate Rodolfo Hernandez, a political outsider who has pledged to shrink government.

Last week, Petro warned of possible election fraud in an interview with Reuters and said that if evidence of such activity was handed to his campaign team, he would denounce it.

New constitution could impact Chile mining, says Moody's

Political uncertainty around a new constitution could cause gridlock in Chile's mining sector, ratings agency Moody's said Wednesday, a reflection of industry concerns in the world's top copper producing nation.

Chilean voters are divided over whether to approve a draft version of a new constitution in a September referendum.

The current text would likely strengthen environmental regulation, which could impact mining of copper and lithium.

"A very important factor will be the legislation to regulate all the norms established by the constitution, which will possibly bring about changes in the conditions for making long-term investments," said Moody's analyst Barbara Mattos.

'Hugs not bullets,' Lopez Obrador repeats after violence

After violent incidents on Tuesday, in which 11 were killed in the state of Mexico after a face-off with authorities and in which a criminal group took over the streets of San Cristobal de las Casas, leaving another dead, President Andres Manuel Lopez Obrador said the country's violence must be tackled through its root causes.

The president called Tuesday's events "regrettable" and said that the country must tend to the causes of violence, which he said include poverty, lack of education, the "disintegration" of families and materialism.

Free bags still a dream for Brazilian travelers

Bolsonaro vetoed a Congress-passed measure that would block airlines from charging for checked baggage on their flights, his office said on Wednesday, sending shares in local carriers higher.

The president vetoed an amendment to a bill he signed into law aimed at simplifying rules for the sector as it emerges from the pandemic-related downturn, blocking companies from charging for bags weighing up to 23 kg in domestic flights and up to 30 kg on international routes.

Brazil's Congress can still override Bolsonaro's veto, but a legislative session would need to be called for that purpose.

Lopez Obrador: New refinery will reach full capacity in 2023

The Mexican president said that a new refinery owned by state-run Petroleos Mexicanos (Pemex) will reach full operating capacity by next year, despite industry experts saying it will take until at least 2024.

Lopez Obrador said in a regular news conference that the Olmeca refinery along the coast of Tabasco, set to open July 2, will go through a "trial period" of several months before beginning production next year.

He also said the country expected crude processing in six currently operating Pemex refineries to increase to 1.2 million barrels per day, up from the current level of 840,000 barrels per day, without specifying a time frame. (Compiled by Brendan O'Boyle and Kylie Madry)