The president of the Senate, Rodrigo Pacheco (PSD-MG), said that the proposal that limits state taxes on fuel and energy should be voted on next Monday (13th).
On the other hand, the Minas Gerais senator did not commit to voting on two proposals for amendments to the Constitution that will also deal with fuel on the same day, one of which will provide for compensation to the states for revenue losses.
The speech corroborates the schedule that was also presented, moments before, by the proposal’s rapporteur, Fernando Bezerra Coelho (MDB-PE). Former government leader in the Senate, Bezerra also said that he will present this Wednesday (8) his report on PLP 18, which limits the ICMS (Tax on the Circulation of Goods and Services). In addition, he will present two proposed amendments to the Constitution — which he also hopes to vote on next Monday.
One of them, as expected, will open up fiscal space for the states to compensate for the loss of revenue with the reduction of ICMS rates. The other will be aimed at opening paths for the reduction of rates for biofuels, so that they remain competitive in comparison with fossil fuels.
“What presents itself as a scenario at this moment is that, after this phase of elaboration of the opinion by Senator Fernando Bezerra, listening to the governors, he should read his opinion on Thursday [9] in a plenary session of the Federal Senate, in the morning. We will allow the discussion around this PLP 18 with the possibility of voting next week, on Monday in the Senate session in the afternoon”, said Pacheco upon arriving for the plenary session.
The senator from Minas also mentioned the presentation of two new PECs, but said that he will wait for the presentation of the texts to make a better analysis of the voting possibilities.
“The PECs, once formalized and having procedural conditions, with sufficient signatures for processing, then we will evaluate the moment for their appreciation, if they should go through the CCJ [Comissão de Constituição e Justiça] or if they will go straight to the plenary”, he added.
The definitions on the schedule for processing the proposals were decided in a virtual meeting of leaders this Tuesday morning (7). Bezerra stated that there will be two meetings between President Rodrigo Pacheco (PSD-MG) and himself with governors. However, for the time being, the trend is for his report to maintain the content of PLP 18 approved by the Chamber of Deputies — the subject of complaints from state governors.
“For now, the text of the Chamber is maintained. But we are going to listen to the governors to be able to see the concerns regarding this device that was introduced in the Chamber”, he said.
Bezerra said that he will present, in addition to his report, the text of the two PECs (Proposed Amendments to the Constitution). One of them, called the Fuels PEC, will be used to reimburse states that agree to keep their fuel rate below 17%.
“School subjects [PLP 18] will be debated at Thursday’s session, at 10 am, when I will read my report in the plenary as well as the PEC report, which is being called the Fuel PEC, which will open the space for compensation to states that want to bring the LPG and diesel rates to zero,” he told reporters.
This PEC will be presented by the government leader in Congress, Senator Eduardo Gomes (PL-TO). Therefore, there is the expectation that it reflects the interests of the Planalto Palace. Bezerra will be the rapporteur.
The second PEC will be aimed at maintaining tax advantages for biofuels.
“The second PEC is the PEC that we are calling the PEC of Biofuels, the PEC of Ethanol, the PEC of sustainable fuels. As everyone knows, there is today in the tax legislation, both state and federal, a differentiated treatment for biofuels. we want, at a time when the rates are being reduced, according to the essentiality of the products and services defined by decision of the Supreme Court and by a vast majority of the Chamber, through this PEC we seek to maintain the competitiveness of sustainable fuels, in the sense of competition with fossil fuels”, he added.
Bezerra stated that all issues involving ethanol will be included in this PEC and not in PLP 18. Senator Fábio Garcia (União Brasil-MT) even met with the rapporteur and presented amendments to provide a greater exemption from ICMS on ethanol in the PLP 18. One of them establishes that the ICMS rate on ethanol is 11%. This percentage is equivalent to 60% of the gasoline rate, which would be 17%. The other amendment provides for exemption from PIS/Cofins, federal taxes, in the ethanol chain.
The senator rapporteur of the proposal did not give full details about his PEC. He only added that it is necessary to guarantee a difference of 70% in the tax burden between biofuels and fossil fuels, to guarantee their competitiveness.
“So, let’s assume. If you have an 18% rate for gasoline, you need to have a rate for alcohol that is 30% lower than that. The PEC is for all taxes, that’s why it’s a PEC, so that the Union and States can have taxation that maintains the sector’s competitiveness”, added the senator.
Bezerra also sent a message to the governors, signaling that the limitation of state taxes to 17% is a reality. He also refuted the states’ argument, stating that there will be no drop in revenue, much less affect health, education and other essential services.
“I would like to make a comment. The reality, the governors, the finance secretaries, need to admit that the issue of essentiality is already a defined issue. For many years, states promoted excessive taxation for fuel, telecommunications, transport and energy”, said.
The senator’s announcement comes the day after a meeting followed by a press conference at Palácio do Planalto, in which President Jair Bolsonaro (PL) announced measures to try to reduce fuel prices.
Pressured by high inflation, just under four months before the election, the Chief Executive announced, three months after zeroing PIS and Cofins rates on diesel and cooking gas by December 2022, the expansion of the scope of the measure to exempt federal taxes also on gasoline and ethanol. According to the president, the PIS/Cofins and Cide rates will be zeroed.
Bolsonaro also announced that the government is willing to reimburse states that accept to zero ICMS rates on diesel and cooking gas with resources from the Union by the end of the year. The package should have an impact of up to BRL 50 billion.
Bolsonaro has been waging a war with states, whom he blames for the rise in fuel prices. In this context, the Chamber of Deputies approved at the end of April the complementary bill 18, which 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.
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