Freezing the fortnightly adjustment of ICMS on consumer price proved ineffective to contain price escalation, state managers claim
Less than 20 days before the end of the ICMS freeze (Tax on the Circulation of Goods and Services) on fuel, the state finance secretaries are discussing whether or not to maintain the measure.
That’s because the price of gasoline and diesel at gas stations has continued to rise since November 1, even with the state tax stagnant.
The understanding is that the federal government has not sought definitive solutions to the issue. Amid accusations by the President of the Republic, Jair Bolsonaro, that the rise in fuel prices was largely due to state governments, Confaz (National Council for Finance Policy) approved the freezing of ICMS on fuel for 90 days, with a view to on January 31 of this year.
Reset every 15 days
The Comsefaz (National Committee of Finance Secretaries) is due to meet later this week to discuss whether the freeze will be extended or whether the States will return to the calculation model by which the tax is levied on the weighted average price to the final consumer, which is readjusted to every 15 days.
Each State has the power to set the rate. According to data from Fecombustíveis (National Federation of Fuel Trade), it varies between 25% and 34% for gasoline, depending on the state. In Santa Catarina it is 25%.
“Freezing the ICMS was of no use. It was a didactic process, and the governors demonstrated that the problem of high fuel prices is not in the ICMS.” André Horta, institutional director of Comsefaz