Bolsonaro sanctions bill that removes expenses with parliamentary amendments from the ceiling

President Jair Bolsonaro (PL) sanctioned, this Wednesday (5), a bill that removes from the ceiling on state spending the expenses with parliamentary amendments and also transfers from the Union.

The proposal was approved by the Senate on December 9 with 56 favorable votes from the senators. At the time, seven were against.

The purpose of the proposal is to provide relief for state finances.

The proposal now sanctioned alters a complementary law of 2016 that created the Assistance Plan for the States and the Federal District and created measures for the fiscal rebalancing of federated entities. This legislation contains provisions that limit the annual growth of primary expenditures to the variation of the IPCA (official inflation index).

The new law removes from these limitations the expenses borne by funds from transfers of the Union with linked applications, such as fund-to-fund transfers, Cide (Contribution for Intervention in the Economic Domain), education salary, Pronatec (National Program for Access to Technical Education and Employment), Pelé Law and others. It also removes expenses with parliamentary amendments from the calculation basis.

In a statement, the Bolsonaro government stated that federated entities that did not comply with the spending ceiling under the renegotiation with the Union would lose facilities.

“The complementary laws in force already eliminate from the ceiling the expenses on minimum expenses with health and education that increase more than the inflation measured by the IPCA; and the expenses paid with voluntary donations and transfers from the Union, and now the exclusion of all expenses paid with federal transfers assigned to specific expenditures, and all transfers provided for in supplemental credits and budget laws,” the statement read.

No vetoes were made to the proposal.

Also without vetoes, the president on Wednesday sanctioned a proposal that regulates the collection of ICMS (Tax on Circulation of Goods and Services) on the sale of products and services in cases where the final consumer resides in a state other than where the item originated —in the case of purchases made online.

The bill was reviewed and approved by a wide margin —70 votes—on December 20th.

The text deals with the transfer of Difal, the difference between the ICMS rate of the receiving state and the interstate rate of the sending state. The objective is to extend the transfer of Difal to operations in which the consumer is not a taxpayer — in general, individuals.

That is, that ICMS is not just concentrated on producing states and is also shared with states in which the final consumers are located.

During the process, the author of the bill, senator Cid Gomes (PDT-CE), argued that the regulation was already made through an act of Confaz (National Council of Finance Police), but the Federal Supreme Court understood that the regulation should be by complementary law.

Until 2015, the Constitution allocated the total ICMS due to the state of origin in operations and benefits whose recipient was located in another state and was not a taxpayer.

However, it was found that there were some distortions with the growth of e-commerce, online sales.

This is because some states that are production and marketing centers started to centralize tax collection, which favored the tax war, as it encouraged states to offer tax benefits for the installation of distribution centers in their territories.

The Congress sought to resolve this issue through a 2015 constitutional amendment. The approved text defined that, in online purchases, the state of origin would only have the interstate ICMS rate, with the destination with the difference between its internal and what was already charged at origin.

As a result, the units of the federation where the distribution centers of goods for electronic resale throughout Brazil are now prorating the ICMS with the destination states of these goods.

Also on Wednesday (5), Bolsonaro sanctioned a project that defines a portion of the lottery collection to be allocated to the CBCP (Brazilian Committee of Paralympic Clubs). According to a statement from Planalto, the purpose of the measure is to encourage Paralympic sport.

In the lottery collection cake, 0.46% will go to the CBC (Brazilian Committee of Clubs) and 0.04% to the CBCP.