STF forms a majority to serve governors and avoid losses of R$ 26.7 billion with ICMS

The STF (Supreme Federal Court) yielded to pressure from governors and formed a majority to establish that the decision to prohibit differentiated ICMS charging for the energy and telecommunications sectors will only be valid from 2024 onwards.

At the end of November, the court had decided to veto states that could charge higher rates to the two sectors in relation to the others. The states, however, began to pressure the Supreme under the argument that the order would represent a loss of R$ 26.7 billion a year in revenue.

Now, in a new trial, the court has backed down and decided to modulate the effects of the decision, which, in practice, means that the new rule will not take effect immediately, as was decided last month.

The ministers Dias Toffoli, Gilmar Mendes, Kassio Nunes Marques, Carmen Lúcia, Alexandre de Moraes, Ricardo Lewandowski, Rosa Weber and Luís Roberto Barroso voted in this regard. Minister Edson Fachin was the only one to disagree.

The judgment takes place in the virtual plenary and the other magistrates have until the end of Friday (17) to include their votes in the system.

In November, the STF had concluded the judgment in favor of a lawsuit filed by Lojas Americanas against the 1996 law of Santa Catarina, which established a 25% rate for these two areas, compared to the 17% charged for ICMS in general.

The judgment takes place in an appeal with recognized general repercussion, which determines that the decision will be valid for all ongoing processes in the country that deal with the issue.

On the 1st of the month, governors met with STF ministers to press for the postponement of the decision’s effects.

Now, Toffoli’s vote prevailed in order to determine that the result of the trial is only valid for 2024 onwards.

“I hereby clarify that I modify the proposal previously prepared by me, in order to establish that the court’s decision takes effect not from the beginning of fiscal year 2022 (as I had suggested in the last session), but from of 2024, the first financial year governed by the next multi-year plan (PPA) of each federated unit,” he said.

Minister Gilmar Mendes followed the same line: “There is undeniable social interest in the adoption of a temporary solution that contemplates the implementation of a budget transition by state managers, ensuring that public policies and especially the fight against the Covid-19 pandemic are not harmed”.

Only the actions that were filed until the beginning of the analysis of the subject in the Supreme Court, in February of this year, are exempt from this decision.