Three more states announced this Friday (1st) cuts in ICMS (Tax on the Circulation of Goods and Services) that affect gasoline. The announcements were made by Rio de Janeiro, Minas Gerais and Santa Catarina.
The announcements come after President Jair Bolsonaro (PL) last week sanctioned the law that limits the collection of ICMS on fuel, electricity, communications and public transport.
The measure is an attempt by the federal government to curb inflation on the eve of elections and thus improve Bolsonaro’s popularity.
The shortage of various items, such as fuel, is seen by members of the president’s campaign as the main obstacle to reelection.
Rio de Janeiro
Bolsonaro’s party colleague, the governor of Rio de Janeiro, Cláudio Castro (PL), announced this Friday that the ICMS tax rate on gasoline in the state will drop from 32% to 18%.
According to Castro, the expectation is for a reduction of up to R$ 1.19 in pumps at gas stations in Rio de Janeiro. The state government projects that the average value of a liter will be around R$ 6.61.
Castro will contest this year’s elections to try to stay in office. By announcing the ICMS cut, he threatened Petrobras, a frequent target of Bolsonaro’s attacks.
“I also warn Petrobras that, if the company maintains the successive price adjustments, we can take energetic action and increase its taxation”, wrote the governor on social media.
“It is not a reasonable profit of R$ 44.5 billion, obtained in the 1st quarter of the year, while thousands of people suffer to take food home”, he amended.
Minas Gerais
The governor of Minas Gerais, Romeu Zema (Novo), said he will sign a decree this Friday to reduce ICMS on gasoline, electricity, telephone and internet services.
The current rates in Minas are 31% on gasoline, 30% on electricity and 27% on communication. All will pass to 18%, according to Zema, who will seek re-election this year.
Santa Catarina
In Santa Catarina, the state government announced the lowering of ICMS rates to 17% on electricity, gasoline, ethanol and telecommunications. The measure was published in the Official State Gazette this Friday morning. The text is effective immediately.
According to studies by the Santa Catarina State Department of Finance, the impacts on revenue for 2022 alone total R$ 1.7 billion. For 2023, the estimated loss is BRL 3.5 billion.
“I signed a provisional measure to reduce ICMS to 17%, effective from today, on electricity, automotive gasoline, fuel alcohol and communication,” wrote the governor of Santa Catarina, Carlos Moisés (Republicans), on social media.
“We have the lowest rates in the country and now we are reducing even more to help control inflation”, amended the governor, who is a pre-candidate for reelection.
Sao Paulo, Goiás​ and EspÃrito Santo have also announced cuts in ICMS rates.
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