Rapporteur rules out compensation to states for ICMS cut, but predicts transition to changes

The rapporteur of the proposal that limits state taxation on fuel and energy, Senator Fernando Bezerra (MDB-PE), ruled out this Thursday (2) the inclusion in his text of new forms of compensation to states – such as compensation accounts, or direct transfer—for the loss of revenue caused by the project.

On the other hand, Bezerra, a former government leader in the Senate, stated that there is room for “modulation”—a transition period to the 17% to 18% ICMS ceiling rate for items such as the electricity bill (limit that the project seeks to implement).

Bezerra made the statements this Thursday afternoon after a meeting he had with representatives of Comsefaz (National Committee of State Finance Secretaries). Senators Davi Alcolumbre (União Brasil-AP) and Jean Paul Prates (PT-RN) also participated.

Shortly before, at another meeting, this time at the Federal Supreme Court (STF), it was agreed that the federal government, states and the National Congress would create a working group that will have until June 14 to reach an agreement on the adoption of measures involving state taxes to reduce fuel prices.

The creation of a compensation account had been one of the suggestions forwarded by the state finance secretaries to Bezerra — which, however, he discarded.

“This conciliation proposal does not include any compensation account, nor does the use of dividends, nor does taxation of oil companies, none of that. Our effort here is to reduce the tax burden. [que limita o ICMS sobre combustíveis e energia] is in the sense of putting an end to excessive taxation”, said Bezerra, after the meeting.

The rapporteur also stated that he will take from his text an excerpt from the project coming from the Chamber that provides for the limit of the state tax also on telecommunications. He only signaled that he must follow an understanding by STF Minister André Mendonça and leave this tax limitation for 2024.

On the other hand, Bezerra said that secretaries proposed a “modulation” to reach the rate of 17% foreseen by the project approved in the Chamber. The rapporteur indicated that he can accept this proposal, although he will discuss it with the government’s economic team first.

“Nothing will be left out. In fact, regarding these items [telecomunicações], there is already a manifestation by Minister André Mendonça for a modulation proposal. The finance secretaries presented a modulation proposal. We will analyze, we will talk to the government team so that we can honor the signaling of these understandings that are being made by the coordination of Minister André Mendonça “, he said.

Bezerra also stated that states agreed that an agreement on the report be reached before the 14th, so that the text can be presented to Minister André Mendonça. The rapporteur also added that he expects his report to be considered by the Senate next week, between Tuesday or Wednesday.

Also present at the meeting, Senator Prates stated that state representatives received information that the compensation account was discarded and that the main reason was the government’s resistance. On the other hand, he stated that the escalation proposal has gained traction.

“But the discussion was good in other ways, in the sense of scaling over time, in the sense of putting telecommunications and energy for 2024, putting fuels for now, maybe adding gasoline and LPG for that moment”, said the senator. .

Décio Padilha, president of Comsefaz (National Committee of State Finance Secretaries), defended the compensation account and the vote on the project that deals with the subject by the Chamber of Deputies.

“We reiterate the position of the national committee that the equalization account is important, regardless of the conciliation debate with the Supreme. So we need to sensitize the Chamber. If bill 1472 is not perfect, it needs changes, we reiterate today that it is important to adjust it and put it to vote.”

The debates around the ICMS should continue in the working group created after the demand of the STF minister André Mendonça, who chaired a conciliation meeting with state and federal government representatives this Thursday. Also participating were the presidents of the Senate and the Chamber of Deputies, respectively Rodrigo Pacheco (PSD-MG) and Arthur Lira (PP-AL).

The conciliation meeting was scheduled to address the legal dispute between states and the federal government over state taxes on diesel. But the discussions will also address the proposal in progress in the Senate that imposes a ceiling on ICMS.

“Minister André Mendonça established two strategic points for conciliation. The first was a deadline until the 14th. It wasn’t us. I asked for an extension. He started on the 9th, but agreed to the 14th. It’s his decision”, said Padilha, from Comsefaz.

​According to him, the second issue will be to debate the single national rate, the non-expansion of the tax base, the essential [de combustíveis e energia] and monophasia (single charge along the chain).

If there is no agreement, Mendonça must simply make the decision in court.

Padilha adds that it will be possible to reach an agreement, so that the text analyzed by the senators undergoes changes so as not to impact the collection so strongly. “What we want is to reduce the impact on revenue,” said Padilha.