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States and DF sue STF against law that limits ICMS collection

The governors of 11 states and the Federal District decided to sue the Federal Supreme Court (STF) against the law, enacted this Tuesday (28) that limits the rate of the Tax on Circulation of Goods and Services (ICMS) levied on some essential products. .

Complementary Law 194/2022 established fuels – including diesel, gasoline and natural gas –, electricity, communications and collective transport as essential items “for taxation purposes”. As a result, states and the Federal District were prevented from charging more than 17% or 18% of ICMS on these goods and services.

The lawsuit filed by the governors asks for an injunction (provisional decision) to suspend the law, which they say is unconstitutional. Among other points, they argue that the federation units have autonomy in setting tax rates.

Local representatives also expressed concern about the reduction in collection, and highlighted that fuels were responsible for 86% of state and district collections in 2021.

The direct action of unconstitutionality (ADI) was opened shortly after states like São Paulo and Goiás stepped forward and limited, on their own, their ICMS rates on fuel. In the opening piece, they argue that the reduction of ICMS as proposed by the federal government is “unfeasible”, as it is the main source of revenue for the states and the Federal District.

The governors of Alagoas, Bahia, Ceará, Federal District, Maranhão, Paraíba, Pernambuco, Piauí, Mato Grosso do Sul, Rio Grande do Norte, Rio Grande do Sul and Sergipe sign the action. None of the North or Southeast states are part of the ADI.

A conciliation hearing was held at the STF this Tuesday in an attempt to close an agreement between the Union, states and DF. At the meeting, states and DF made a proposal with four points to try to reach an agreement with the Union, which undertook to study and respond by the end of Wednesday (29).

Government ministers have defended the measure, saying that it is right in a global context of struggle to reduce fuel prices.

Source: CNN Brasil

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