IPVA and ICMS on fuel should help to fatten state cash in 2022

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After a 2021 of high inflation, fueled by high fuel prices, and soaring used vehicle prices, taxes that weigh on drivers’ pockets should help to fatten state cashiers in 2022.

The jump in state revenue has been noticed since last year. More recent data from Confaz (National Council for Finance Policy), of the Ministry of Economy, indicate that the inflow of resources through all state taxes increased by 15.4% between 2020 and 2021, even considering that part of the amounts December has not yet been consolidated.

When looking only at how much the states pocketed with the IPVA (Tax on the Property of Motor Vehicles), the increase is 2.25% (still without the effect of the increase in used vehicles in 2021), totaling R$ 50 billion in the last year.

In the case of the total ICMS (Tax on the Circulation of Goods and Services) on fuels, oil and lubricants, the variation is 30.3% in the period, a total of R$ 104.8 billion. And, for this year, the perspectives are of new highs in the collection with the two taxes.

Together, São Paulo, Minas Gerais, Paraná, Rio de Janeiro, Rio Grande do Sul, Santa Catarina and Bahia accounted for 73% of all vehicles in circulation in the country last year, including those exempt from IPVA, according to Sindipeças (Union of Components for Motor Vehicles).

Sefaz-SP (São Paulo State Treasury Department) estimates that tax revenue will reach R$21.8 billion in 2022, from a level of R$18.53 billion — an increase of 15%.

The rate remains at 4%, but due to the negative effects of the pandemic and inflation – which closed last year at 10.06% – the market value of vehicles rose 22.54%, on average, according to the survey. made by Fipe (Fundação Instituto de Pesquisas Econômicas).

The IPVA has always represented an important source of revenue for the states, but from 2021 to 2022, these resources should have even more weight, agrees Rafael Korff Wagner, partner at Lippert Advogados and president of the IET (Instituto de Estudos Tributários).

“Some states had an increase in revenue, mainly because of the high prices of used vehicles, which serve as a basis for tax calculation. The crisis in the production of new cars, due to chain problems, such as the lack of imported semiconductors, in led to this scenario.”

He adds that some states were studying bills to avoid the increase in IPVA in 2021, without correcting the average value of vehicles.

In Minas Gerais, the estimate is that the IPVA generates a collection of R$ 6.5 billion, a variation of 6.5% in relation to the 2021 result. amount 35% higher than that recorded a year earlier.

In Rio Grande do Sul, the expectation is to raise R$ 4.2 billion, an amount that is automatically distributed 50% to the state and 50% to the municipality of the vehicle licensing. If confirmed, this year’s collection will represent a 25% increase compared to 2021.

Santa Catarina, in turn, should receive R$ 2.7 billion, after adding R$ 2.29 billion in 2021. Bahia says it adopts a conservative perspective for collection in 2022. For the IPVA, the forecast is R$ 1.64 billion, an increase of 5.5% compared to 2021.

The government of Rio de Janeiro was the only one among the states with the largest fleets that did not disclose estimates for 2022. Between January and November 2021, the collection was BRL 3.25 billion.

“It is a fact that the rise in car prices impacted the IPVA, indirectly increasing this tax. All this is due to the high inflation of 2021, which was at a level that had not been seen in the country for more than five years and reveals lack of control in public accounts and fiscal irresponsibility”, evaluates Fernando Facury Scaff, professor of financial law at USP (University of São Paulo).

According to the state governments, in addition to the effects of inflation and the rise in the value of used vehicles, part of the explanation also lies in the growth of the fleet in some states, such as Paraná and Minas Gerais.

INFLATION THROWN GASOLINE ON FUEL ICMS

With the ICMS on fuel, state coffers should also be fuller this year.

São Paulo, for example, estimates that the total ICMS collection in 2022, contained in the Annual Budget Law, will be R$ 191.48 billion. In 2021, the collection of this tax was BRL 185.63 billion, with the fuel segment accounting for BRL 20.72 billion.

Projecting the average share of fuels in the total, the collection of this segment should be around R$ 22.19 billion in 2022 for the São Paulo government.

In the assessment of Wagner, from the IET, international prices should continue to drive ICMS tax collection on fuel. “States came to freeze the tax for 90 days until January, but the consumer did not feel it at the pump.”

Fuels, in fact, rose much more than the general average of prices, which ended up being reflected in the increase in collection. Last year, ethanol was the item of the IPCA (the country’s official inflation) that accumulated the highest increase, 62.23%. Gasoline rose 47.49%; diesel oil, 46.04%.​

The states’ cash position was greatly favored by Petrobras’ policy of transferring the rise in the dollar and international prices directly to consumers, agrees Scaff. “ICMS took a ride on this policy, which punished consumers and taxpayers.”

By majority vote, the secretaries of Comsefaz (National Committee of Secretaries of Finance of the States and the Federal District) decided last week to end, as of January 31, the freezing of ICMS on fuel.

The end of the freeze is another chapter in the clash between Jair Bolsonaro (PL) and the governors. According to the president, the state tax was to blame for fuel inflation, which was countered by state governments.

“Petrobras’ pricing policy only serves to maintain and increase the oil company’s profits,” said the governor of Piauí, Wellington Dias (PT), who is coordinator of the National Forum of Governors, announcing the end of the freeze.

“It is directly up to the federal government, through Petrobras, the fuel price policy, and the government of São Paulo has no interference in the matter”, says Sefaz-SP.

During the freeze, in case of new readjustments, the stations passed on only the increase in the refinery price, not including the effect of the subsequent increase in the PMPF (Weighted Average Price to the Final Consumer). Now, the impact on the thawing pumps is expected to occur as early as February.

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