The project approved by the Chamber of Deputies on Wednesday (25) that sets a ceiling for ICMS on products and services considered essential may reduce inflation in the short term, but does not guarantee that the index will continue to accumulate lows in the long term, experts say. consulted by CNN Brasil Business .
Pedro Paulo Silveira, managing director of Futura Asset, said in an interview with CNN, this Thursday (26), that the approved bill was not thought of as a long-term solution.
“Evidently, in order to combat inflation itself, by reducing the tax you increase the income of families and companies, and this, at some point, will make inflation rise again. It’s a complex balance, which I think from a long-term point of view was not an adequate solution,” said Silveira.
For Silveira, although the project has a good appeal to reduce inflation and gasoline prices at the pump, the text was not properly discussed, “precisely because states may run out of funds for education, public security and other sectors”.
The text establishes that goods and services related to fuel, electricity, communications, natural gas and public transport are considered essential, preventing the application of tax rates equal to those of products listed as superfluous.
The objective of the project is to alleviate the price of services that have been suffering from inflation for months and, thus, are passed on to the final consumer, such as fuel and electricity.
For the investment allocation specialist at Warren Carlos Macedo, the estimate is that the project can reduce inflation by 1.7 percentage points, however, he mentions that the duration is the big question. In addition, he evaluates that the judicialization of the project and possible changes in the text could still increase, if approved, the percentage.
Fernanda Consorte, chief economist at Banco Ourinvest, also believes that the proposal should reduce prices in the short term, however, she lists that other factors can neutralize this fall.
The specialist cites the exchange rate and the costs of commodities abroad, two aspects that would be out of internal control.
Impact for states
Another criticism raised about the project concerns the impact that it can have on public accounts and public policies in states and municipalities.
In an interview with CNN Duarte Nogueira, secretary general of the National Front of Mayors (FNP), stated that the ICMS is the main source of revenue for municipalities, and that the decrease in the collection of this tax will affect public policies.
Duarte estimated that the loss of revenue for the municipalities in two and a half years could reach R$ 53 billion. In 2022, the impact would be R$11 billion less.
“If there is a loss of revenue, of course there will be an impact on public policies, there will be a reduction in transfers for the issue of education, health, social assistance”, said Nogueira.
With the objective of trying to avoid damages to the states, the text presented by deputy and rapporteur Elmar Nascimento (União-BA) establishes that, if the loss of collection of the states in the year 2022 exceeds 5% of what they collected in 2021 because of this reduction of the ICMS rate, the federal government will bear the excess.
This surplus value will be deducted from the state’s debts with the Union. The intention is for the compensation to be valid from the publication of the text as law, if sanctioned in these terms, and to have a deadline until December 31 of this year or the end of the balance of the contractual debt of the state or Federal District managed by the National Treasury. Whichever comes first.
States undergoing tax recovery will be treated differently. In this case, they will receive compensation for any loss of revenue from the measure. So not just the 5% surplus, but the entire value.
The bill was approved by the vast majority of federal deputies. The score was 403 votes in favor and 10 votes against. There were two abstentions. Of the eight highlights presented, all analyzed and rejected by parliamentarians. The matter now goes to the Federal Senate for analysis.
Source: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
