Governors extend ICMS gas freeze until end of June

The governors decided to extend the ICMS (Imposto sobre a Circulação de Mercadorias e Serviços) freeze on gasoline and LPG (liquefied petroleum gas) until the end of June. The measure would be valid until the end of March, but was postponed for another 90 days.

The decision was made this Tuesday (22) at a meeting of the Forum of Governors and still needs to be formally confirmed at a meeting of Confaz (National Council for Finance Policy) to be held next Thursday (24).

With the freeze, the basis for calculating the tax on gasoline remains unchanged since November – when the measure was adopted for fuels in general by decision of the states themselves. The initial forecast was that it would be valid until the end of January.

Comsefaz (National Committee of State and Federal District Finance Secretaries) states that the freeze led states to reduce their revenues by R$3.4 billion in the period from November 2021 to February 15 this year.

The new extension covers only gasoline and LPG, while the diesel charge will be modified in another process – as a result of a law already passed by Congress and sanctioned by President Jair Bolsonaro (PL) this month.

The system for charging ICMS on fuel is based on the so-called Weighted Average Price to Final Consumers (PMPF) – a value calculated every two weeks based on surveys carried out by the state on the values ​​observed in a sample of gas stations.

After verifying the PMPF, the state applies the ICMS rate in force to it, which results, in practice, in a tax value per liter – which is extended to the entire state. That is, an increase in the PMPF usually raises the ICMS charge for all stations.

Complementary law 192 amends the rules. It was fully sanctioned by Bolsonaro on March 11 and will zero PIS/Cofins rates on diesel and gas by the end of 2022, in addition to modifying the ICMS.

Instead of the price at the pumps, the law determines that the ICMS charge will establish a fixed value per liter. Also, the tax rate will be the same in all states.

Over the past few weeks, states have claimed the new law could even increase the tax levied. More recently, however, they signaled that they were studying an alternative to avoid lifting the load.

The idea is to establish as a single rate the value equivalent to the maximum percentage used by the states, currently at 18%, and allow, in agreement with Confaz, the granting of a tax benefit on fuel. Thus, each state could charge an amount equivalent to the rate it currently charges.

The governor of Piauí, Wellington Dias (PT), said this Tuesday that the states are still discussing the effects of the law and did not provide details. According to him, only the constitutionality of a part of the sanctioned law that deals with the transition of rules will be challenged.

The law determines at this point that, while the incidence of ICMS is not regulated under the terms of the new law, the tax calculation base this year will be the moving average of the average prices practiced in the 60 months prior to its establishment.

Dias avoided making estimates on the ICMS to be applied per liter on diesel, but technicians involved in the discussions say it will be close to R$0.99 — although the debates are still ongoing and should be concluded this week.

Dias also stated that the governors will contest in the STF (Federal Supreme Court) the decree that reduced the IPI (Tax on Industrialized Products) by 25%. The impact on public coffers is approximately R$ 20 billion per year, half for the Union and the other half for states and municipalities.