Parliamentarians are negotiating changes in the project that limits the collection of ICMS (Imposto sobre Circulação de Mercadorias e Serviços) applied to electricity and fuels to reduce resistance to the text and facilitate approval in both the House and the Senate.
The complementary bill had the urgency approved by the deputies last Wednesday (18), amid pressure from the president of the Chamber, Arthur Lira (PP-AL) – who demanded from the government a solution against the increase in the light.
The negotiation involves wiping the text — which was attached to a related project and which is reported by the leader of União Brasil in the Chamber, Elmar Nascimento (BA).
The project classifies fuels, electricity, communications and public transport as essential goods and services. The idea is, therefore, to establish a maximum ICMS rate on these items.
The author of the project, deputy Danilo Forte (União Brasil-CE), defends that the text be simplified to deal only with energy and fuel.
“Simply put, it’s easier to vote. Let’s see if we vote on this tomorrow [terça] for the Senate to vote the next week. So, until the end of June, we deliver to the Brazilian people what is our obligation, to take the initiative to lower the energy bill and the fuel bill “, he said.
He said he was talking to the project’s rapporteur about the changes. If approved, he says, the text could reduce the energy bill from 10% to 11%. The impact on fuels would vary between 9% and 12%.
If the proposal is approved, ICMS taxation on these items would be limited thanks to an understanding reached by the Federal Supreme Court (STF) in November 2021. The Court considered that essential goods and services – such as energy and telecommunications – cannot be taxed than operations in general, which have rates between 17% and 18% in the states.
Lira and Minister Paulo Guedes (Economy) make a joint effort to try to reduce the resistance of Senate President Rodrigo Pacheco (PSD-MG) to the text.
Guedes’ team argues that the governors have full boxes and that it is necessary to return this revenue directly to the population instead of departing for solutions seen as ineffective – such as the creation of subsidies. Therefore, cutting taxes is considered the most appropriate act.
Guedes defended the plan in conversation with Pacheco. The two met on Friday (20) and, after hearing the arguments, the Senate president replied that he would analyze the issue.
Pacheco had already had a previous meeting with Lira about the project. Although he did not manifest himself to the contrary, the senator said that the studies would be in-depth and that there would be dialogue with leaders of the House to evaluate the proposal.
There is a possibility of greater resistance in the Senate because of the proximity of the House to the states. The leader of Podemos, Álvaro Dias (PR), points out that there is “strong opposition from the governors” and that the proposal could cause a “huge hole in the revenue of the states”.
The CMN (National Confederation of Municipalities) calculates a loss of R$ 65.6 billion for the public coffers — and, for mayors (who receive part of the governors’ collection with ICMS), the annual loss would be R$ 15, 4 billion.
The PSDB leader in the Senate, Izalci Lucas (DF), denies that there are disputes with the Chamber that could affect the processing of the proposal. “The project will be discussed, we will need to see what will happen in the Chamber. Of course, here it will be treated differently, it will be well analyzed, after all, each project is something. But there is no resentment. “, he says.
A leader of an important caucus, however, says that the project is very “invasive” in the competences of the states. He also criticizes the view that governors are accumulating large reserves with increased collections and that they would not be impacted by changes in ICMS rules.
Lira has been making an offensive to try to reduce the price of energy. On the 3rd, the deputies approved the urgency of a draft legislative decree (PDL) that stops the readjustments in Ceará. With this, the text can be voted on in plenary.
The PDL is used as a way to pressure the country’s distributors to review the increase in tariffs. This is because there is an articulation so that the substitute of the text includes not only Ceará, whose tariff was readjusted by 24%, but other states that also had an increase.
The project’s vote is viewed with reservations within the government, especially due to the legal uncertainty that the breach of contracts would represent.
Government and allies have expressed concern about the impact of inflation on this year’s elections. According to Datafolha, 68% of Brazilians think that the administration of President Jair Bolsonaro (PL) is responsible, for example, for the rise in fuel prices.
In the case of the electricity bill, calculations show that Brazilians will pay at least 12% more in the average residential tariff —almost 4 percentage points above last year’s adjustment, which was 8%. The greatest weight will be felt by residents of the Northeast region: the residential tariff will be 17% more expensive.
Understand
What does the House want to vote on?
Project that classifies fuels, electricity, communications and public transport as essential goods and services. This would mean that the ICMS (state tax) on these items could not have a higher rate than the general percentage (between 17% and 18%, depending on the state).
What is the impact on the electricity bill?
According to the author, the value could be reduced from 10% to 11%.
How does the Senate view the text?
The Senate resists voting on a text that affects one of the states’ revenue sources. In March, Congress approved a project that changes the ICMS charge on fuels and brings PIS/Cofins rates on diesel and gas to zero by the end of 2022. The states maneuvered to maintain the collection and the government appealed to the STF to resolve the dispute.
What other alternatives are in play?
In addition to the bill that limits ICMS, the Chamber can also vote on a draft legislative decree that suspends tariff readjustments. Today, the text refers only to Ceará, but the idea is to include other states in a substitute if the pressure on distributors does not work.
The Chamber is also discussing a project that creates the regulatory framework for the electricity sector and allows free market consumers to carry their electricity bills between distributors.
The text would include the construction of gas pipelines across the country and could directly benefit Carlos Suarez, a former partner at the construction company OAS and known as the “king of gas”.
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