Chamber approves bill that prohibits charging ICMS on additional tariff flags

The Chamber of Deputies approved this Wednesday (8) a bill that prohibits the collection of ICMS (state tax) on the additional tariff flags for electricity, another proposal that seeks to reduce the electricity bill in the country.

The bill, authored by now Senator Fabio Garcia (União Brasil-MT) and Deputy Hildo Rocha (MDB-MA), was approved by 405 to 1. Now, it goes to the Senate.

The project is part of the government’s offensive to try to reduce the impact of adjustments to the electricity bill, which, in the assessment of President Jair Bolsonaro’s (PL) allies, could compromise reelection in October.

The tariff flags were adopted in 2015 to indicate, in the electricity bill, the costs of generating electricity.

The colors —green, yellow and red level 1 and red level 2— indicate whether the cost will be higher or lower due to the reduction in reservoir volumes due to lack of rain, when it may be necessary to activate thermoelectric plants, which are more expensive.​

“It is not fair to the citizen to have to pay for a higher energy cost, due to water scarcity, for droughts”, says Senator Fabio Garcia.

“What we seek with this project is to do justice with the citizen, with the electricity consumer, so that he is not doubly burdened, first by the additional charge of the tariff flag and also by the tax that goes on top of that”, he added. .

In the justification, the authors argue that the project does not interfere with the collection of the federal government and states and municipalities, “since they will continue to charge their taxes on the regular energy tariff, which is the tariff defined by Aneel, the result of a planned operation and regular without anomalies.”

“With this project, governments will not continue to collect more on the additional portion of the tariff resulting from unfavorable and unplanned power generation conditions”, they argue.

On Tuesday (7), the Chamber approved a project that provides for the return to consumers of tax credits collected from electricity distributors. According to estimates, the measure could reduce the electricity bill by 5% this year.

Congress also articulates a PEC with an impact of R$ 25.7 billion that will allow the Union to compensate states and municipalities that zero ICMS rates on diesel and cooking gas.

In the Senate, a bill is being processed that classifies items such as fuel and energy as essential goods and services and, with that, seeks to establish a ceiling on the ICMS rate applied to them.

The project piggybacks on a decision by the Federal Supreme Court (STF) that demanded that essential items cannot be charged more than the basic rate applied by the state. Some governors charge up to 25% on diesel and 34% on gasoline (while the basic ICMS is 17% to 18%, depending on the state).