Bolsonaro says Ministry of Justice should file lawsuits against states over fuel prices

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President Jair Bolsonaro (PL) said this Thursday (10th) that the Ministry of Justice should file lawsuits against states over fuel prices.

The representative did not detail what these actions would consist of.

“The states are profiting a lot from ICMS [Imposto sobre a Circulação de Mercadorias e Serviços] of fuels. The amount of PIS/Cofins, which is the federal tax, has been frozen since January 2019. For example: [o preço da] Gasoline is high, right? seven reais [o litro da] gasoline — our share is R$0.69, PIS/Cofins. On the other hand, that of governors is on average R$ 2.10, because it is on average 30% of the final value of the pump. Today I contacted the Ministry of Justice so that our Secon [Senacon, a Secretaria Nacional do Consumidor]which is late in this regard, start filing lawsuits against states”, declared Bolsonaro, during his weekly live.

“The ICMS is levied on freight, is levied on the profit margin. If I’m not mistaken in the last five weeks, alcohol has dropped in price. Have you seen the price drop at the end of the line? It hasn’t lowered the price,” he said.

Bolsonaro is a critic of the way states collect the ICMS on fuel and blames the state tax for the rise in prices at gas stations.

The governors deny that they are responsible for the advance in prices.

At the beginning of his live, the president complained that the states recorded ICMS collection records last year.

“States set a record with ICMS collection in 2021, especially ICMS on fuels. Back then I filed a lawsuit with the Federal Supreme Court to enforce a 2001 Constitutional Amendment, which says that the value of ICMS has to be nominal and for all of Brazil. It remains to be regulated there; we asked the Supreme for help, it is going to the fifth month and Minister Rosa Weber, who is the rapporteur, does not send it there”, he declared.

The rise in fuel prices has guaranteed the states greater revenue from the collection of ICMS on these products.

The higher tax collection was also cited by the president of the Chamber, deputy Arthur Lira (PP-AL), as a justification for a cut in the ICMS rate.

Still in the live, Bolsonaro defended the PEC (Proposed Amendment to the Constitution) that allows the reduction of taxes on fuel in broader terms than was defended by Minister Paulo Guedes (Economy).

The text of the proposal was drafted at Palácio do Planalto and filed in the Chamber by Deputy Christino Áureo (PP-RJ), an ally of Minister Ciro Nogueira (Casa Civil).

The PEC says that the Union, states and municipalities will be able to zero or partially reduce tax rates levied on fuel and gas, “as a result of the social and economic consequences of the Covid-19 pandemic”. The tax cut may occur without offsetting revenues, still according to the PEC.

Guedes advocated lowering the tax only on diesel, but the protocol proposal is broader and also covers gasoline, ethanol and cooking gas.

“There is a proposal for an Amendment to the Constitution, authored by a congressman from Rio de Janeiro, giving us the possibility, in the federal and state government, to renounce revenue — to reduce the tax, ICMS, PIS/Cofins, without having to look for an alternative source for that revenue waiver,” Bolsonaro said on the live.

“I’m sure it will pass, I believe unanimously in the House and Senate.

It is not an obligation to zero or reduce taxes, but it gives the President of the Republic and governors the chance to reduce taxes. This once enacted, we will seek a way to enforce the PEC and serve the population. After all, the price of fuel is very high, especially diesel”.

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