Zema announces reduction in ICMS; decree goes into effect today (1/7) – Policy

Romeo Zema (New)
Governor Romeu Zema said that he will sign the decree today (1/7) (photo: Leandro Couri/EM/DA Press)

Governor Romeu Zema (Novo) announced this Friday (7/1) that he will sign the Decree that reduces the Tax on Circulation of Goods and Services (ICMS) on gasoline, electricity, telephone and internet services in Minas Gerais.

According to the Executive, the decision to reduce all taxes to 18% from this Friday. “Gasoline tax was 31%, electricity 30% and communication 27%. All will rise to 18% in our state as of today”, wrote Zema on his social media.

The reduction of the state tax occurred after the bill sanctioned by President Jair Bolsonaro (PL), on June 23, which limits the ICMS. In the enacted law, states cannot charge a higher rate, which can range between 17% and 18% depending on the state.

Despite the decision, state governments estimate a loss of R$ 83 billion in revenue with the approval of the project, which may affect investment resources in other areas.
Zema was already showing appreciation for the tax reduction, but the governor feared the impact on the funds. In Minas, a reduction of R$ 8 billion to R$ 10 billion in the state’s annual collection is expected.

“In the case of Minas Gerais, which only recently brought its payroll up to date, many municipalities have very tight budgets, and the ICMS that pays for health and education for the municipalities,” said the Governor, in an interview at the future Farmcia de Minas unit. , in Belo Horizonte, last Tuesday (28/6).

President Bolsonaro has been pushing for the law to be passed for some time. At one point, the Chief Executive even promised states that they would reduce the tax, but the president vetoed the text.

Cheapest gasoline?

For consumers, this is good news, says the economist and coordinator of Mercado Mineiro, Feliciano Abreu. The specialist says that it is still too early to estimate the reduction in fuel prices and indicates that it will also depend on gas stations, but depending on federal taxes, around R$ 0.68. “ICMS has to wait, but I believe it’s in the same range”, he points out.

“We had already been following the reduction due to federal taxes, which are PIS, Cofins and Cide, and now adding to the reduction of ICMS, there will be a good drop for the consumer, right? an important reduction, yes”, highlights the specialist.

Abreu warns consumers to keep an eye on prices and charge gas stations for the drop in value at supply pumps. He says that the reduction will not be immediate, as there is still a lot in stock, but it is necessary to keep track.

“According to the ranks, the issue of federal taxes is still falling. So, even actually getting cheaper prices due to ICMS also takes a while, but this week we will already have significant reductions”, he highlights.

The specialist highlights how the charge is necessary for prices to come down really. “Because otherwise this reduction will be in the profit margin of the stations, which will not happen because the competition is also very heavy between the stations. So, then, the expectation is very good for the moment, right? what we have and what we can have at this moment”, he says.

About Abhishek Pratap

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

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