Farm offers BRL 22 billion in ICMS agreement, but states want higher value


The federal government has proposed to the states a compensation in the amount of R$ 22.5 billion to replace the losses imposed by the cut of the ICMS (Tax on Circulation of Goods and Services) on fuels, approved in 2022 under the government of Jair Bolsonaro (PL) .

The states were dissatisfied and are now looking for a higher value. A counterproposal is being prepared by the finance secretaries and, according to interlocutors interviewed by the Sheetmay involve a debt renegotiation claim with the Union.

The states are considering asking for compensation of R$ 30 billion, plus an extension of debts with the federal government by ten years.

The last debt renegotiation of the states took place in 2016, when an additional period of 20 years was granted for the settlement of contracts. A new negotiation of this type would require approval from the National Congress.

The agreement offer was presented this Wednesday (8) by the Secretary of the National Treasury, Rogério Ceron, in a meeting with state finance secretaries. The proposal was endorsed by Minister Fernando Haddad (PT).

The states, however, asked for greater compensation. On Tuesday, governors were with Haddad and spoke of a replacement of up to R$ 45 billion.

During this Wednesday’s meeting, there was mention of an even higher amount, of R$ 70 billion, although it was an isolated speech, without endorsement by all secretaries.

In an attempt to close the deal, the group of states even proposed R$ 37 billion. According to interlocutors interviewed by SheetCeron withdrew from the room to consult Haddad, but the Farm’s position was to stand by its offer.

According to reports, representatives of the folder indicated at the meeting that the Union has already made a big gesture by raising the offer to R$ 22.5 billion.

In a meeting that took place in January, the federal government argued that the “fair value” of the compensation would be between R$ 13 billion and R$ 16 billion.

The payment of compensation by the Union to the states is one of the main impasses at the beginning of the government of Luiz Inácio Lula da Silva (PT).

The new administration has intensified negotiations to put an end to the issue. In December, the STF (Federal Supreme Court) gave the Union and states a period of 120 days to reach an agreement.

The fight began when Bolsonaro, who maintained a bellicose relationship with the governors, obtained support in Congress to approve a law that standardized the ICMS rate on gasoline, diesel and ethanol. The text entered into force in March 2022, with the aim of reducing fuel prices in an election year.

State tax was levied at a fixed amount per liter (“ad rem”) instead of a percentage. The measure had a billionaire impact on the states’ cash flow.

Three months later, a second law was passed limiting ICMS rates on fuel and electricity, on the grounds that they are essential goods. The text also provided for compensation to states that had losses greater than 5% in tax collection, but the wording of the rule left room for different interpretations. The way to calculate this repair is the main target of disagreements.

In an attempt to put pressure on the states, the Union wants to link the financial agreement to support, in the STF, for state claims that do not directly involve federal government resources.

One of them is the debate about whether or not gasoline is essential. If this fuel is maintained as an essential good, its rate should remain locked. On the other hand, if states convince the Supreme Court that it is not an essential product, they could increase the burden on the item.

Union support for the state governments’ thesis could contribute to a greater chance of success. But the Treasury indicated that this gesture will only come if the states accept the compensation proposal.

The deadline for payment is also the target of an impasse. On Tuesday, governors said that the Union asked to make the compensation in a staggered way, until 2026 – when the current terms of the Presidency of the Republic and the heads of state Executives end.

Haddad’s objective is to dilute the impact of the agreement on public finances, at a time when the minister is trying to demonstrate his commitment to financial sustainability and debt control.

The states, on the other hand, want payments to be made in 2023. The expectation is that negotiations will continue in the coming days.

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