With new law on ICMS, Fundeb may lose R$ 19.2 billion

With new law on ICMS, Fundeb may lose R$ 19.2 billion

The bill that establishes a limit of 17% of the maximum rate of the Tax on the Circulation of Goods and Services (ICMS), already approved in the Chamber of Deputies and now under analysis in the Federal Senate, would generate an impact of up to R$ 19.2 billion in Brazilian education.

According to the non-governmental organization (NGO) Todos pela Educação, this would be the amount that would no longer be allocated to the Fund for the Maintenance and Development of Basic Education and the Valorization of Education Professionals (Fundeb), which would represent a loss of 8%.

Article 212 of the Federal Constitution establishes a minimum allocation of 25% of the tax collection for the maintenance and development of education. That is, if the rate limit is established on ICMS, the collection would be directly impacted and, therefore, the transfer of resources.

States and municipalities, benefiting from the tax, are responsible for 80% of enrollments in basic education, according to the NGO, which also warns of a reduction in spending on education.

In 2020, Brazilian municipalities spent 6% less on the sector compared to 2019, while states reduced their expenses by 9% in the same period.

All for Education reinforces the urgency of investments in education, a sector heavily impacted by the pandemic. According to the NGO, in 2021, 40.8% of Brazilian children aged six and seven could not read or write, an increase of 15 percentage points compared to 2019.

Project processing

The rapporteur of the project that establishes a ceiling for ICMS, Senator Fernando Bezerra Coelho (MDB-PE), has been working on the inclusion of a compensation fund to the States in exchange for lost revenue due to the reduction of the rate for fuels, electricity , gas and telecommunications.

According to reports made to CNN the proposal is that the fund be formed by federal government revenues with dividends paid by Petrobras.

Senators who are participating in the discussion of the idea told the CNN in a reserved character, that the idea is to resume what had already been proposed by Senator Jean Paul Prates (PT-RN) — whose main objective is to contain the volatility of the price of oil.

*With information from Thais Arbex

Source: CNN Brasil