Minister Alexandre de Moraes, of the Federal Supreme Court (STF), authorized the governments of São Paulo and Piauí to compensate for ICMS losses on gasoline, electricity and communications through discounts on installments of the states’ debts with the Union.
The preliminary decisions are added to similar authorizations already granted to Maranhão and Alagoas. The states allege revenue losses with the enactment of the law that sets a ceiling of 17% or 18% for the ICMS rates levied on items that are now considered essential.
The states’ argument is that the law that created the state tax ceiling includes a trigger that allows states to write off debts with the Union, if the measures lead to a drop of more than 5% in total ICMS collection.
“According to studies by the Secretary of Finance and Planning, it is estimated that the state of São Paulo will no longer collect, in 2022, the amount of R$ 3.2 billion, related to ICMS levied on gasoline, electricity and communications” , said the government of São Paulo, in the initial action.
In the case of São Paulo, Moraes’ determination establishes that the state government will be able to carry out “as of next August, the immediate compensation of the installments falling due under the debt agreement between the State of São Paulo and the Federal Government, administered by the Secretary of the National Treasury , with ICMS losses levied on gasoline, electricity and communications, which exceed 5%, calculated month by month based on the same period of the previous year, with monetary correction.”
It also prevents the Federal Government from including the state of São Paulo in any non-payment record for non-payment of debt services due to compensation; as well as “embarrass the state of São Paulo in the process of Credit and Agreement operations and in its rating classification (credit risk) at the federal level, as a consequence of the compensation requested herein”.
São Paulo’s Finance Secretary, Felipe Salto, said that Moraes’ decision “restores the minimum federative balance.” “With the injunction, São Paulo, which has its accounts in order, will be compensated with a reduction in interest payments and debt installments with the Union. Nothing could be more fair.”
The sanction of the ICMS ceiling for fuels and other items took place on June 23.
The move is part of the Planalto Palace’s offensive to reduce the price of gasoline and diesel a few months before the elections.
Bolsonaro is in second place in polls, behind former president Luiz Inácio Lula da Silva (PT).
The project was the subject of intense dispute between states and municipalities, which warned of the loss of revenue, and the federal government, which, with the support of Congress, used the moment of high revenue to claim full coffers in the states and space for the cut. of taxes.
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
