Union and states fail to reach agreement on ICMS at a meeting at the Supreme Court

Facade of the Brazilian Federal Supreme Court
Facade of the Federal Supreme Court (STF), in Brasília.| Photo: Marcello Casal Jr/Agência Brasil.

The Federal Supreme Court (STF) held this Tuesday (2) a new hearing of the commission seeking conciliation between the states and the federal government on the compensation of the Tax on the Circulation of Goods and Services (ICMS) on essential products, such as fuel, electricity, communications and public transport. This was the first meeting between the parties mediated by a special commission created by the Court, by order of Minister Gilmar Mendes.

The issue is discussed in the action in which President Jair Bolsonaro (PL) defends the limitation of the tax rate, in the 26 states and the Federal District. The legal impasse began after the enactment of Complementary Law 192/2022. With the law, states were prevented from charging more than 17% or 18% of ICMS on these goods and services.

At the meeting, the National Committee of Secretaries of Finance (Comsefaz) stated that the annual loss of the states is R$ 92 billion. On the other hand, the Union declared that the states showed an increase of R$ 48 billion in tax collection. Faced with the differences, a new hearing was scheduled for August 16.

In June, before the commission was established, the first hearing between the Union and state representatives took place, in which the impasse also remained. The work of the commission must continue until November 4th. The collegiate is also composed of representatives of the Senate, the Chamber of Deputies and the Federal Audit Court (TCU).

In the Allegation of Noncompliance with Fundamental Precept 984, a process that motivates the discussion, the Attorney General’s Office (AGU) maintained that fuel operations should be treated similarly to electric energy and telecommunications services, considered as essential goods. The governors claim that the laws dealing with the ICMS on fuels hinder the budgetary programming of the states. With information from Agência Brasil.

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