States want compensation fund for ICMS losses

The state finance secretaries are going to propose the creation of a fund to compensate the losses with the reduction of ICMS on fuels and electricity. The fund would be made up of Petrobras dividends, oil royalties and special participation in the production of the commodity. With that, the fund would reach R$ 35 billion.

This amount would no longer enter the federal government’s coffers. To prevent this loss, the states’ proposal provides for an increase in the CSLL levied on oil. Today, the contribution is at 9%. It would rise to 30% if the price per barrel exceeds US$ 80. Below that, the rate would be 20%. With that, the federal government’s losses would be zero, calculate the state secretaries.

The ideas will be presented tomorrow to Senator Fernando Bezerra Coelho (MDP-PE), rapporteur of the project that classifies fuels, natural gas, electricity, communications and public transport as essential goods and services. With this, it would be worth understanding the STF (Supreme Federal Court) that limits the incidence of the tax to a range of 17% to 18% on these items.

Coelho will meet with 15 state secretaries. The main argument of the states is that the loss of revenue will have a direct impact on spending on health, education and poverty alleviation. For health and education alone, it would be around R$ 20 billion. In addition, 24 states have anti-poverty funds whose revenues come from ICMS. All would be compromised if the project is approved without changes.

The creation of a compensation account was the main point of a bill passed by the Senate in March of this year. However, the proposal ended up shelved in the Chamber of Deputies. The president of that House, deputy Arthur Lira (PP-AL), resists using resources from oil royalties for this purpose.

Senators even indicated that the approval of the bill that limits state taxes on fuel and energy would only advance in the Senate with an agreement. It would involve taking out of the Chamber’s drawer the proposal providing for the compensation account. The condition then began to lose strength.

The bill that came from the Chamber also provides for compensation to states in case of loss of revenue, the so-called trigger. For indebted entities, the Union will deduct from the value of the installments of the debt contracts the collection losses greater than 5% in relation to 2021. The deduction goes until December 31, 2022 or until the debt runs out.

For the secretaries, it is a broken trigger because with double-digit inflation, the loss of ICMS collection should reach close to 20% for the trigger to be activated, which will not happen.

The Senate began this week to analyze the proposal that limits state taxes, a week after it was approved by the Chamber of Deputies. Initially, resistance from senators was anticipated because of the proximity of these parliamentarians to the Brazilian states, which complain about the impact on revenue – they estimate up to R$ 83 billion per year.