Bolsonaro sanctions tax limit and vetoes compensation

President Jair Bolsonaro (PL) sanctioned, in an extra edition of the Official Gazette today, the bill passed in Congress that limits the ICMS (Tax on the Circulation of Goods and Services). However, the Chief Executive vetoed compensation to states to maintain the same amounts of spending on health and education as before the sanction.

The new law classifies items such as diesel, gasoline, electricity, communications and public transport as essential. As a result, states cannot charge a rate higher than the rate, which varies between 17% and 18%.

In addition to the veto on compensation to the constitutional floors of health and education, the contracting of loans to states that already had the rate provided for in the new law was also vetoed. The president maintained compensation for indebted entities that had a loss in revenue above 5% in the comparison between 2022 and 2021.

“Despite the pandemic environment, in the last two years there has been a significant improvement in the fiscal situation of states and municipalities, especially as a result of the growth in ICMS collection”.

Guedes decides to propose greater Brazil Aid

President Jair Bolsonaro’s vetoes come after, according to the UOL, the Minister of Economy, Paulo Guedes, hit the hammer regarding the expansion by R$ 200, to R$ 600 per month, of the value of Auxílio Brasil (ex-Bolsa Família) and the launch of the truck driver aid of R$ 1,000, nicknamed “Pix Caminhoneiro”, to compensate for the rise in diesel in Brazil. O UOL found out that the minister also supports the idea of ​​doubling the value of the gas allowance, currently at R$53.

These three actions, with an estimated total cost of R$29 billion, are already being discussed with party leaders in Congress. The measures come at a time when President Jair Bolsonaro (PL) is trying to improve his popularity to seek re-election. He appears behind ex-president Luiz Inácio Lula da Silva (PT) in the voting intention polls — some project Lula’s victory in the first round.

The government’s intention is to pass the changes through a PEC (Proposed Amendment to the Constitution), together with the proposal to establish a state of emergency. The column found that the government is trying to articulate the vote as early as next Tuesday (28), in the Senate. In tune with the government of Jair Bolsonaro (PL), the president of the Chamber, deputy Arthur Lira, would also have already committed to voting for the PEC before the parliamentary recess.

The view within the ministry is that ICMS compensation would have few short-term benefits and, with the exchange, it would not be necessary to depend on governors to reduce fuel prices at the pump. For the governmentists, the governors are judicializing the ICMS issue and politicizing the discourse.

About Abhishek Pratap

Food maven. Unapologetic travel fanatic. MCU's fan. Infuriatingly humble creator. Award-winning pop culture ninja.

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