The AGU (Advocacy-General of the Union) manifested itself this Tuesday (14) against the proposed agreement made by the states to resolve the impasse with the federal government regarding the tax reduction on fuels and other items.
With this, Minister André Mendonça, of the STF (Supreme Federal Court), must decide alone, even if provisionally, on the dispute.
The states accepted to make cuts in the ICMS (Tax on the Circulation of Goods and Services), but they want to be fully reimbursed by the Union.
In a document presented in the Supreme Court’s action on the issue, the body reproduces a technical analysis by the Ministry of Economy, which pointed out that the states’ proposal seeks “the perpetuity of measures that are manifestly unconstitutional and that significantly contribute to the worsening of prices”.
“It is evident the existence of substantive disagreement not only in relation to the premises adopted by Comsefaz [comitê de secretários estaduais da Fazenda]as well as on the feasibility of accepting the compensation measures proposed by this collegiate, reasons that hinder any progress towards the compositional solution in these records”, says the document signed by the Union’s attorney general, Bruno Bianco.
This Monday (13), the states had presented a proposal to reconcile the impasse with the federal government about the tax reduction on fuel and other items.
Minister André Mendonça, rapporteur for the action in the STF that analyzes the ICMS cuts, gave the federal government and the Senate 24 hours to express their views on the suggestion.
As there is no agreement between the parties, the minister must decide alone on the case, by means of an injunction (provisional determination).
The arguments of the Special Secretariat for the Treasury and Budget, of the Ministry of Economy, reproduced by the AGU is that the states’ proposal should not be accepted because “it disregards all the effort adopted by the federal government over the last few years to face the pandemic of Covid”.
In addition, it would also disregard “the structural legislative measures that were approved by the National Congress with the objective of deepening fiscal consolidation in the federated entities”.
“These measures significantly impacted the fiscal result of the states and municipalities, allowing the establishment of the country’s macroeconomic foundations and the improvement of the fiscal health of the federated entities”, said the Secretariat.
The discussion in the STF began after Congress passed a bill to reduce taxes on diesel and states regulated the text in such a way that there were no practical changes. The government then filed a request to declare Comsefaz’s decision unconstitutional.
At the beginning of the month, Mendonça had determined that the Union and the states would close an agreement by this Tuesday. He considered that the problem needed an “urgent and immediate solution, given the fuel price crisis that is ravaging the country.”
Even if the minister provisionally decides on the case, those involved may later present a new proposal that reconciles all interests.
The discussions in the STF involve, in addition to the law that changed the taxation of diesel, another bill under discussion in Congress that limits the ICMS on fuels, collective transport, electricity and telecommunications, considering them to be essential goods and services (a previous decision of the STF prohibits ICMS taxation higher than the general for such items).
In the proposal presented this Monday, the states gave in in part and suggested reducing the tax calculation base on these items until the end of 2022, so that the effective tax burden corresponds to the application of the general rate of each state (and not higher percentages). high, as is the case in much of the country today).
In exchange, they ask the Union to fully compensate them for the losses, using revenues or debt relief with the National Treasury. The governors would also be compensated even for the freezing, until the end of 2022, of the Weighted Average Price to the Final Consumer (PMPF, value raised from a survey of values in the gas stations and which serves as the basis for state taxation on fuel).
Compensation would be triggered when a 5% drop in tax revenues is observed in the items under discussion in relation to the same periods last year.
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