There is no confrontation between government and states, we put entities in the blue, says Guedes

There is no confrontation between the federal government and the states, which are in the dark due to measures adopted by the current management, said this Tuesday (16) the Minister of Economy, Paulo Guedes, minimizing the legal dispute between the Union and governments. regional organizations around the tax reduction implemented this year.

In a meeting at the Federal Supreme Court (STF), Guedes defended that the final solution on the distribution of resources in the federation passes through the approval of a broad tax reform.

The meeting was led by STF minister Gilmar Mendes, who created a commission to discuss solutions to the impasse between the federal government and states after Congress approved a ceiling for the collection of the state ICMS tax on fuel, telecommunications, electricity and public transport.

Guedes stated that a political war was created in this discussion and sought to maintain that regional governments have an unprecedented positive situation in their accounts after initiatives by the federal government.

Among the actions, he cited transfer agreements to entities involving transfers of the Kandir Law, revenue gains from oil auctions, expansion of Fundeb (fund for basic education) and emergency resources during the pandemic, in addition to blocking readjustments to servers.

Guedes argued that the states will not lose cash with the ceiling placed on taxation.

“Let’s see the balance before we fight,” he said. “If the numbers show that there was a strong increase in revenue despite the reduction in rates, the game goes on. If, on the contrary, they show that there was damage to the federation, I will be ashamed, we will want to review it ourselves.”

At the meeting, the minister also said that the federal government has the right to lower taxes to offset revenue gains, in reference to the STF’s suspension of the IPI tax rate cut by 35%.