Moraes suspends payment of Maranhão’s debt due to a drop in ICMS

Alexandre de Moraes
Moraes accepted a request from the state of Maranhão, which says it is unable to pay installments of the public debt after drops in ICMS revenue.| Photo: STF

The Minister of the Federal Supreme Court (STF) Alexandre de Moraes suspended the payment of installments due on the public debt of the state of Maranhão with the Union and five other banks with which the Maranhão government has contracts. The decision is preliminary and meets a formal request in an Original Civil Action sent to the Court.

In it, the state says it is unable to pay the commitments (including the installments referring to July 2022) because of the drop in state revenues due to recent changes promoted in the legislation. Among them, fixing ceiling for the ICMS tax rate on fuelsnatural gas, electricity, communications and public transport, provided for in supplementary law in force since June. According to the state of Maranhão, it would be unfeasible to wait for the possibility of compensation for the losses suffered, in addition to the risk of complete stoppage of essential services provided to the local population and the discontinuity of numerous public policies.

Upon accepting the request, Moraes noted that the Supreme Court has acted to grant urgent judicial protection to suspend the effects of acts carried out by the Union that may seriously or irreversibly compromise the continuity of the execution of public policies or the provision of essential services. to the collectivity. In the minister’s assessment, in a preliminary analysis of the case, it is possible to affirm that the restriction on state taxation caused by Complementary Laws 192/2022 and 194/2022, unilaterally, without consulting the states, “causes a profound imbalance in the account of the entities of the federation”. For him, therefore, the scenario makes it justifiable to suspend the payment of installments until a mechanism is made possible to restore the balance of the contractual basis.

The decision also prevents the Union from executing counter-guarantees arising from the breach of contracts and also suspends payments due related to contracts between the state of Maranhão and Banco do Brasil, Caixa, Banco Nacional de Desenvolvimento Economico e Social (BNDES), Banco Interamericano de Desenvolvimento (BID) and the Brazil Loan Trust 1. The amount related to Maranhão’s public debt to be paid in fiscal year 2022 exceeds BRL 611 million, divided into 14 financing agreements.

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