Governors ask STF to deem ICMS change on fuel unconstitutional

The governors of 11 states asked the STF (Supreme Federal Court) to consider the law that changed the rules for the incidence of ICMS on fuel unconstitutional.

Complementary law 192 was passed in March 2022 in an attempt by the government and the National Congress to lower the price of gasoline and diesel and, thus, the impact of this on electoral campaigns.

The states’ request was presented after a series of actions by the Jair Bolsonaro government (PL) in the STF, which contests state laws and decisions regarding the incidence of the tribute.

The ICMS is the responsibility of the states, which did not like the law passed by Congress with the support of the Planalto. “This is true ‘charity with someone else’s hat’, a budgetary liberality to be suffered by states, DF and municipalities, all surprised by the unilateral, authoritarian, drastic measure and with serious immediate effects for the weakened coffers of these entities”, says the piece, which has not yet had a designated rapporteur minister.

The governors of Alagoas, Bahia, Ceará, Maranhão, Mato Grosso do Sul, Paraíba, Pernambuco, Piauí, Rio Grande do Norte, Rio Grande do Sul and Sergipe signed the order.

The law passed by Congress changed different points in charging ICMS on fuel, but not all of them bothered the governors. The points questioned in the STF were the standardization of the rate charged, the change in the calculation method, which was previously a percentage of the amount paid by the consumer and became a fixed amount per liter, and the prohibition of changing more than once a year the ICMS rate.

The states ask for an injunction injunction so that these changes are suspended until the STF has a final decision on the matter.

In the request, the states allege that the federal government sought a “magic solution” to lower fuel prices, and that responsibility lies with the “tariff policy of Petrobras, a mixed-capital company under the control of the Union itself, and aggravated by the economic crisis world”.

Another problem, continues the piece, is that “all this was done without any study of fiscal impact and without demonstrating that this new instrument will be effective, given that fuel prices are linked to the fate of international markets and the result of a dubious of Petrobras”. “It is not difficult to understand that this measure is populist, electoral and ineffective”, he concluded.

The action by the states comes in the wake of a series of other lawsuits filed by President Jair Bolsonaro (PL) regarding ICMS.

In one of these actions, Minister André Mendonça determined on the 17th that the states charge the tax on diesel on a smaller basis as of July 1st.

The minister made the decision after states and the Union failed to reach an agreement to resolve an impasse with the federal government regarding tax reductions on fuel and other items.

Mendonça, appointed to the STF by President Jair Bolsonaro, also gave Petrobras five days to present “detailed information” on the criteria adopted by the company in its pricing policy over the last 60 months.

A lawsuit on the 15th signed by the president and the attorney general of the Union, Bruno Bianco, asked the Supreme Court to suspend laws in the states and the Federal District that set ICMS rates on fuel operations.

The president claims 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.

The president’s actions in the STF are part of an offensive to reduce fuel prices in an election year.