The plenary of the Chamber of Deputies approved, on Wednesday night (25), by 403 votes in favor and 10 against, the Complementary Law Project nº 18, which limits the collection of ICMS (Tax on Circulation of Goods and Services) to 17%. ) on fuel, electricity, public transport and communications. The proposal now goes to the Senate.
During the afternoon, federal deputy Elmar Nascimento (União-BA) stated that his new opinion on the project would include a lock to avoid revenue losses in the municipalities. In his preliminary opinion, presented on Tuesday (24), Nascimento had predicted that the Union would compensate the states this year if the loss of ICMS collection exceeds 5%. In search of greater support in Congress, the deputy decided to extend the benefit to municipalities.
“Since yesterday, there has been a demand from deputies and mayors in the sense that we could extend this lock to municipalities, given that 25% of ICMS revenue is shared with these municipalities. And we are also extending this guarantee to municipalities,” he said. the deputy, in a press conference in the Chamber of Deputies.
The addition responds to pressure from municipalities on parliamentarians. This Wednesday, the president of the CNM (National Confederation of Municipalities), Paulo Roberto Ziulkoski, sent a message to mayors from all over Brazil asking them to contact “their deputy or federal deputy” to prevent the approval of the project.
What does the project say?
Complementary Law Project No. 18 limits ICMS on fuel (gasoline, aviation kerosene, diesel oil, anhydrous alcohol and hydrated alcohol), electricity, public transport and communications to 17%.
Authored by federal deputy Danilo Forte (União-CE), the proposal provides for these services to be classified as “essential” in the tax legislation.
The percentage of 17% takes into account a recent decision of the Federal Supreme Court (STF), which considered that the tax on electricity and communications services, as they are considered essential, cannot exceed 17%. In its decision, the court dealt with a dispute involving the collection of ICMS of 25% in the state of Santa Catarina.
In recent days, Forte has been citing that the law being discussed in the Chamber could reduce the energy bill from 10% to 11% and from 9% to 12% the value of fuel.
How will the compensation be?
Nascimento explained that his opinion provides a lock for possible losses of states and municipalities with the ICMS limitation. According to him, with the limitation at 17%, if a state loses more than 5% of revenue – considering the general taxation, on all products – the Union will pay for the excess loss. The government compensation will only be valid for 2022.
In practice, if the loss is below 5%, it will be absorbed by states and municipalities. If it exceeds this percentage, the surplus will be financed by the Union.
“We established a 5% lock, in which any drop in the state’s total collection that exceeds 5% would be borne by the Union”, explained Nascimento, adding that the municipalities were also incorporated into this rule.
According to the deputy, the government of Jair Bolsonaro (PL) is in favor of the lock. Nascimento stated that the expectation of the government’s economic team is that the Union will not have to compensate for the drop in revenue in the states and municipalities. The vision is that the drop in ICMS collection on fuel and electricity, for example, will be offset by the increase in tax collection on other services.
“The government’s economic team believes that there will be no loss, because this money does not cease to exist. If you spend less money on fuel, because the tax rate has been lowered, what is left in your pocket, the subject will spend it on something else. pay ICMS on other products. This is the government’s bet”, he said.
States criticized project
The governors were opposing the proposal that limits the value of ICMS, the main tax charged by the states. According to them, reducing tax collection puts the provision of services to the population at risk.
In a note released on Monday (23), Comsefaz (National Committee of State and Federal District Finance Secretaries) stated that the project that limits ICMS on fuels to 17% “aims to force the state legislature to reduce revenues that today they finance state and municipal public services”.
“Not only the fact of precarious or extinguishing services that are used mainly by the poorest population, the proposal is ruinous for the finances of states and municipalities in an aggression to the autonomy by submitting to drastic budget losses”, added the committee.
Attempt to hold prices
The bill is yet another attempt by the government and Congress to hold fuel prices in Brazil after the most recent increases.
In March, the Senate and the Chamber approved a project that obliges states and the Federal District to adopt a single ICMS tax rate for fuels. The rate corresponds to a fixed amount, in reais, per liter of fuel. In the previous rule, each unit of the federation charged a different percentage on the value of the fuel. Thus, when the price of fuel goes up, the collection also goes up.
In the wake of the law, Confaz (National Council for Finance Policy) set the ICMS rate for diesel at R$ 1.006. The new rule would go into effect on July 1.
At the same time that it fixed this rate, Confaz adopted an adjustment of “load equalization” to prevent states that currently have ICMS less than R$ 1.006 per liter from having to increase the charge from July 1st. It is a kind of discount, which makes ICMS equal to what is already practiced in each state.
On May 13, a decision by STF Minister André Mendonça suspended the application of the single rate, after questioning by the federal government. In practice, the ICMS issue remains undefined.
Exchanges of minister and president of Petrobras
Outside the legislative environment, Bolsonaro also acts to hold fuel prices.
Among the most recent actions, the president fired at the beginning of May the Minister of Mines and Energy, Bento Albuquerque, and appointed Adolfo Sachsida, who worked at the Ministry of Economy, to his place.
On Monday night (23), the government announced the resignation of the president of Petrobras, José Mauro Ferreira Coelho, who had only been in office for 40 days. In his place, the current special secretary for Debureaucratization, Management and Digital Government, Caio Mario Paes de Andrade, also linked to the Ministry of Economy, was appointed.
Bolsonaro reportedly decided to fire Coelho after the company refused to sell fuel at a discount to consumers. One of the fears is that, during the electoral period, the company will promote new adjustments, harming Bolsonaro’s campaign.