Bolsonaro asks STF to suspend state laws on fuel ICMS

President Jair Bolsonaro (PL) presented to the STF (Federal Supreme Court) an action in which he asks for the suspension of laws of the states and the Federal District that fix ICMS rates on fuel operations.

The request, signed by the president and the attorney general of the Union, Bruno Bianco, is another of Bolsonaro’s attempts to reduce the price of fuel in an election year.

This Wednesday (15), the Chamber concluded the vote on a project that limits the rates of taxes on fuel. State Finance Secretaries estimate that the text could represent losses of around R$ 115 billion.

To the STF, the president alleges that state rules on the subject are unconstitutional, as they set “abusive rates” of ICMS, higher “than that incident for operations in general”.

“The strong asymmetry of ICMS rates gives rise to problems that go far beyond the integrity of Brazilian fiscal federalism, especially burdening the final consumer, who ends up penalized with the high cost generated by excessive rates for fuels – which are essential inputs, and therefore , should be treated with modesty,” the lawsuit states.

“It should be noted that the aforementioned charge, in addition to reaching the final recipient of an essential product, burdens numerous consumption and production chains that are socially relevant”, he says.

The federal government requests that the suspension of the norms related to the subject in the states be determined in an injunction (provisional and urgent).

Then, it asks that, in a later analysis, the Supreme Court decides that all these rules are unconstitutional. The president asked that the action be forwarded to the rapporteurship of Minister André Mendonça, who is already responsible for another action on the subject.

This Tuesday (14), the AGU (Advocacy-General of the Union) had already spoken out against a proposal for an agreement made by the states to resolve the impasse with the federal government regarding the tax reduction on fuel and other items.

With that, Minister André Mendonça 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”.

The arguments of the Special Secretariat for the Treasury and Budget, of the Ministry of Economy, reproduced by the AGU are 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”.