After Bolsonaro Exempts PIS and Cofins, States Raise ICMS on Diesel and Cooking Gas

Increase in ICMS for Fuels Is an Obstacle to the Transfer of PIS and Cofins Exemption Granted Last Week by Bolsonaro

Even after the federal tax exemption of PIS and Cofins decreed by President Jair Bolsonaro, 18 states and the Federal District will increase, starting this Monday (03/15), the reference price for the ICMS charge on diesel oil. Also exempt from taxes for two weeks, the gas cylinder will have an increase in state taxes in 12 states and the Federal District.

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After two weeks of exemption, the liter of diesel was sold at Brazilian gas stations at an average price of R$ 4.232, practically stable compared to R$ 4.230 the previous week, but 1.14% higher than R$ 4.184 reported in the week before the decree that eliminated PIS/Cofins on the product.

In other words, the benefit of R$ 0.30 per liter of diesel with the exemption was negated by Petrobras’ new price adjustment at refineries. Last week, it was R$ 0.15 per liter – and by the increase in the biodiesel blend in the fuel sold at gas stations.

The increase in ICMS for fuels is charged on a reference price defined by state finance secretariats every 15 days and arises as an obstacle to the transfer of the benefit announced last week by President Jair Bolsonaro.

In addition to diesel, PIS/Cofins has been exempt from cooking gas, which would guarantee a discount of R$ 2.80 per cylinder. Even so, the average price of the gas cylinder rose 2.3% last week, according to ANP, to R$ 83.34. Since the federal tax exemption, the accumulated increase is 3.3%.

Bolsonaro Sends a Bill to Congress to Change ICMS Collection

The states defend themselves by stating that the reference price, known as PMPF (average weighted price to final consumers), is calculated based on a survey of selling prices at gas stations. Thus, any increases or cuts would respond to market fluctuations. The model is questioned by Bolsonaro, who a month ago sent a bill to Congress proposing changes to ICMS collection, creating a fixed rate in reais.

Bolsonaro argues that the current system feeds into rising prices, as the tax rises when prices are high, leading to new pass-throughs at the pumps. The government’s proposal has the support of the fuel sector, but faces resistance from states that claim a loss of tax management capacity.

Confaz (National Council of Tax Policy) reports that only Bahia, Ceará, Maranhão, Minas Gerais, Mato Grosso, Mato Grosso do Sul, Pará, and Pernambuco will keep the PMPF unchanged in the second half of March. No state has decided to align with the federal government and reduce the tax.

The Confaz act regarding the PMPF shows that, in addition to the Federal District, the following states will increase the tax: Acre, Alagoas, Amazonas, Amapá, Espírito Santo, Goiás, Paraíba, Piauí, Paraná, Rio de Janeiro, Rio Grande do Norte, Rondônia, Roraima, Rio Grande do Sul, Santa Catarina, Sergipe, São Paulo, and Tocantins.

According to the ANP, the liter of gasoline was sold in the country at an average price of R$ 5.492 last week, a 3.8% increase compared to the previous week. The product has already undergone six adjustments at Petrobras’ refineries in 2021 and was the main factor behind the acceleration of the IPCA, which closed February at 0.86%.