Senate to vote on fuel ICMS ceiling this Monday (13)

The Sendo Federal should vote this Monday (13) the bill approved by the House that limits the Tax on Circulation of Goods and Services (ICMS) on fuel. The information had already been anticipated by the project’s rapporteur, Senator Fernando Bezerra (MDB-PE), last Tuesday (7).

Bezerra maintained in his report the structure of the text approved by the Chamber. The proposal classifies fuels, public transport, communication and electricity as essential goods, which means that the ICMS levied on these products by the states is limited to 17%, with immediate effect after the project is sanctioned.

For states that have a loss of revenue in the year 2022 above 5% of what they collected in 2021, the federal government will bear the surplus. This surplus value will be deducted from the debts of the affected state with the Union.

Federated entities should not be obliged to follow a determined ICMS rate in order to respect the autonomy of the states and the Federal District, but this rate cannot exceed 17%.

For states without debt to the Union, compensation will be made in 2023 with funds from the Financial Compensation for the Exploration of Mineral Resources (CFEM). These states will still have priority in borrowing in 2022.

Compensation will also be allowed through adjustments with loans already made with other creditors, with the guarantee of the Union. This compensation will be valid until December 31 of this year.

proposed changes

Although the structure of the project was maintained, the rapporteur informed that he proposed some changes. Bezerra stated that he implemented:

• Adjustments in the rules for setting rates to respect the autonomy of states and the Federal District, provided that the essentiality of goods and services is respected;
• Expansion of legal certainty for public managers in the application of the law in relation to the Fiscal Responsibility Law and the Budget Guidelines Law;
• Improvement of the compensation mechanism;
• Reduction to zero of PIS/Cofins and PIS/Cofins rates – Import on hydrated fuel alcohol and anhydrous alcohol;
• Reduction to zero of PIS/Cofins and PIS/Cofins rates – Imports on gasoline.

The senator also provided details on the improvement of the compensation mechanism to the states:

• The calculation of losses will refer to the PLP18 goods and services;
• Compensation will be made on debt service and not on debt stock;
• For debt-free states, compensation will be made in 2023 with funds from the Financial Compensation for the Exploration of Mineral Resources (CFEM) and with prioritization of borrowing in 2022;
• Compensation will be allowed through adjustments with loans already made with other creditors, with the guarantee of the Union.