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The Expectation Is That the Rapporteur of the Ministry, Fernando Haddad, Will Continue the Decisions for the ICMS Compensation to the States Within 4 Years. The Federal Government’s Objective Is to Find a Middle Ground for the Situation After Significant Losses in the National Economy.
The Federal Government’s projections regarding the ICMS (Tax on Circulation of Goods and Services) compensation to the States are quite optimistic. Under the leadership of the new Minister of Finance, Fernando Haddad, it is expected that the compensation will occur, gradually, within 4 years, by the end of Lula’s Government. The year 2022 saw significant revenue losses for the national economy, but the market is expected to stabilize over the next 4 years.
Federal Government Prepares Gradual ICMS Compensation to States and Hopes to Find Favorable Middle Ground Over the Next 4 Years
The situation of monetary loss over the past year regarding ICMS revenue in Brazil is the main topic in the national economy at the moment.
The Governor of Espírito Santo, Renato Casagrande (PSB), stated this Tuesday that the compensation to States and municipalities for the ICMS revenue loss should be made within 4 years, as provided by the Federal Government.
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After the change of the tax rate on this revenue in 2022, there is an estimated loss of more than R$ 45 billion.
“The federal government wants to make this recomposition. They asked for it to be done within the term, in 4 years,” commented the specialist regarding the Lula Government’s stance on the issue.
A working team focused on the ICMS compensation issue met with the head of the ministry, Fernando Haddad, at the National Governors’ Forum to discuss the topic.
Casagrande mentioned that, although it is well on track, the issue still requires a meeting between the Secretary of the National Treasury, Rogério Ceron, and the State Finance Secretaries.
The objective of Haddad and the Federal Government with this meeting is to understand the situation of each State regarding the economy to proceed with the ICMS compensation.
In September 2022, the government of Jair Bolsonaro (PL) issued ordinance 7,889, which deals with this compensation. The Executive head of Espírito Santo mentioned that the Union estimated a loss of R$ 13 billion.
The Federal Government’s Objective and That of Fernando Haddad for the Tax Compensation Over the Next 4 Years Is to Find a Middle Ground Consistent with the Brazilian Economy
Casagrande cited a “median” between R$ 13 billion and R$ 45 billion. The Governor of Goiás, Ronaldo Caiado (União Brasil), emphasized that the Federal Government is meeting the needs of the States, even with the installment payment.
“The main interest is the compensation. How will this compensation take place? Will it cover 100% of our losses or will it be divided?” he highlighted.
The specialist also stated that topics such as Difal (Differential Tax Rate), the non-essentiality of gasoline, as well as the withdrawals of Tust (Fee for the Use of the Electric Energy Transmission System) and Tusd (Fee for the Use of the Electric Energy Distribution System) directly impact the ICMS issue.
Now, Haddad continues with the Federal Government seeking measures to ensure a good ICMS compensation amidst economic instability.
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