The government does not consider it necessary to compensate for any loss of state revenue if Congress passes a bill that limits the collection of ICMS on fuels and natural gas, telecommunications, electricity and public transport, informed the Senate Minority leader, Jean Paul Prates ( PT-RN), but the tendency is for senators to improve the trigger already approved by the Chamber to cover a drop in the collection of entities.
Prates, who participates in the project’s discussions and was present at a meeting this Thursday between state finance secretaries and the rapporteur of the proposal, senator Fernando Bezerra Coelho (MDB-PE), confirmed that the states offered the suggestion of creating a fund to compensate for revenue losses, but assessed that the measure “probably” should not be adopted.
“It was discussed, but it probably won’t be necessary,” the senator said after the meeting.
“The government does not accept to put this in the discussion”, he added.
The secretaries had already met with the rapporteur of the proposal on Tuesday and were to formalize suggestions to the text this Thursday. Bezerra added that he intends to present his opinion as early as next week.
Prates explained that there is no definition on the compensation, but considered that there have been advances on other fronts. According to him, there should be a schedule for limiting ICMS taxation and the telecommunications and electricity sectors should have their rules changed only from 2024, while the effects of the project would already fall on fuels and LPG this year.
“Now this whole part of the fund, the compensation, is what will still be under discussion. So far, no source of account or fund has been accepted, or even direct transfer from the federal government to the States to compensate for this”, he reported.
Approved by the Chamber last week, the project reported by Bezerra does not set a rate, but includes fuels, electricity, natural gas, communications and public transport in the list of essential sectors, which in practice limits the ICMS rate levied on them to about of 17%.
Asked if the idea is to follow the essence of the Chamber’s text, which provides for a trigger in case of loss of revenue, the leader said that “for now, yes, but we also tend to evolve in this sense of eventually also rewarding the States that are compliant”.
“We are going to work on a solution so that it really works. Now see, all of this is based on the assumption that there is a concept of compensation or restitution in some way and at this moment this goodwill does not exist yet”, he said.
The text sent by the Chamber to the Senate establishes that, for entities that have joined the Tax Recovery Regime (RRF), the amount not collected will be compensated by means of a deduction in the installments of the payment of the refinanced debts up to the limit of the loss of collection or the extinction of the debit balance.
The project as it stands also establishes that States indebted to the Union without a refinancing agreement under the RRF will have similar compensation, limited to what exceeds 5% of revenue losses.