States defend that the Senate rejects change in ICMS on fuels

BRASILIA – The states want the Senate to reject the bill that promotes changes in the calculation of ICMS on fuel, approved on Wednesday in the Chamber of Deputies.

The position belongs to the National Committee of Secretaries of Finance, Finance, Revenue or Taxation of the States and the Federal District (Comsefaz), which is yet to start talks with the senators and the president of the House, Rodrigo Pacheco (DEM-MG), to stop the proposal led by the president of the Chamber, Arthur Lira (PP-AL).

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Pacheco said on Thursday that he intends to hear the governors first before setting the vote in the Senate. He also stated that the text will have to go through a special commission before going to the House’s plenary.

The bill approved by the Chamber determines that the ICMS rates will be fixed, renewed every 12 months. The collection cannot exceed, in reais per liter, the value of the average prices to the final consumer, considering the period of two previous years.

This change would promote a loss of revenue of R$ 24 billion for the states and municipalities. City halls receive 25% of state tax revenue.

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— The main thing is that the bill is not approved (in the Senate). Today we are going to hold a meeting on a coordinated formula for actions and dialogue with the president of the Senate, to talk about it – explains the institutional director of Comsefaz, André Horta.

For states, project is unconstitutional

Comsefaz also claims that the text is unconstitutional, as it violates the autonomy of the states and extrapolates the role of Congress in terms of tax definition.

According to Horta, if the text goes forward in the Senate, there is already a discussion for the entities to call the courts to overturn the law.

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Asked about the possibility of Comsefaz agreeing with the proposal, in case there is any kind of compensation for the loss of revenue, Horta was categorical in stating that there was never any conversation in this regard.

He also spoke about the argument that state tax revenues increased, making it feasible to cut the fuel tax.

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For the director of Comsefaz, the inflationary issue puts pressure on all prices, and the comparison made with the collection of 2020 is wrong, because it starts from a consumption base that is depressed because of the pandemic.

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— The states want to lose revenue from the ICMS on fuel, with the price falling. Why? This facilitates the production process, makes the economy move and reduces inflation. This makes the population buy the other products. So, this does not change in any way the ICMS collection, which will be instigated by other paths – evaluates.

Change would not reach the population, says Comsefaz director

For André Horta, this project will not result in a reduction in the price of fuel for the final consumer.

The change in tax collection may impact the cost of fuel, but it would not be noticed by the population because Petrobras’ pricing policy, which maintains parity with the international market, will not be modified.

Horta advocates that Congress analyze the proposed amendment to the Constitution (PEC) 110, which is in the Senate and promotes a change in consumption taxes, creating a Dual Value Added Tax (VAT):

— In PEC 110, the states accept changes that are much deeper than this (fuel ICMS), such as financial credit. But there is an aliquot calibration there – he defends.