Rapporteur maintains compensation to states and municipalities in 2022 for ICMS reduction

The rapporteur of the bill that seeks to reduce the ICMS rate for energy, fuels, collective transport and communications, federal deputy Elmar Nascimento (União Brasil-BA), informed this Wednesday (25) that he will maintain the forecast that states and municipalities are compensated by the federal government in 2022 for any losses in revenue as a result of the measure.

The intention of the text to be presented by Elmar Nascimento so that it can be voted on in the plenary of the Chamber of Deputies this Wednesday is that, if the loss of revenue from states and municipalities exceeds 5% of what they used to collect before with these products, the federal government will bear the surplus.

“Up to 5% the state pays. Whatever exceeds 5%, the compensation belongs to the Union,” he declared.

This rebate would be deducted from the debts of states and municipalities with the Union. That is, the debt balance would decrease. The idea is that the compensation will be valid from the publication of the text as law, if sanctioned in these terms, until December 31 of this year.

Deputies are still discussing whether states undergoing fiscal recovery, such as Rio de Janeiro, may receive different treatment. In this case, compensation could be received for any loss of revenue from the measure. So not just the 5% surplus, but the entire value.

Initially, deputies planned to cover only states, but Elmar Nascimento said he should extend the 5% trigger to municipalities. Compensation should also be through the abatement of debts they have with the Union.

“What is being voted on in this project is whether or not these goods are considered essential goods and services. If they are, then due to the constitutional interpretation of the Supreme, they cannot have a higher taxation that varies from 17% to 18%. So that’s the scope of the project,” he said.

According to Elmar Nascimento, the government’s economic team believes that states and municipalities should not experience loss of revenue.

“Because that money does not cease to exist. If you spend less money on fuel, because the price lowered the tax rate, what was left in your pocket, the guy will spend it on something else. It’s not time to save anything. And you will pay ICMS on another product”, he argued.

In a report released earlier, the deputy pointed out that “in Minas Gerais, for example, electricity for residential use is taxed at around 30%, while gasoline is subject to a rate of 31%, diesel oil at 15%, beverages 30% alcohol, 18% alcoholic beer, industrialized foods, footwear, clothing, medicines at 18%, automobiles at 12%, construction materials at 12% and granite and marble at 7%”.

“The same curious fact is repeated in the other states of the federation: in Santa Catarina, the ICMS-electricity tax rate of 25% is applied, while toys, jewelry and fireworks fall within the general rate of 17%”, added.