Shortly before the deadline, AGU asked for 30 days to analyze the proposal made by the States
Minister Gilmar Mendes, of the STF (Federal Supreme Court), decided this Friday (July 1, 2022) to give the Union another 5 days to express its opinion on the possibility of an agreement with the States regarding the collection of ICMS (Tax on Circulation of Goods and Services) on fuel.
On the 4th (June 29), the AGU (Advocacia Geral da União) asked for 30 days to analyze the agreement. Said that “the impacts of the proposal” required additional time for the Union to speak out. The request was made on the day that the 24-hour period defined by Gilmar for sending the opinion expired.
For the Supreme Minister, the topic dealt with in the agreement has “density capable of shaking the federative pact”. Here’s the intact of the decision (248 KB).
The agreement between states and the federal government was defined on Tuesday (June 28, 2022), after a virtual conciliation hearing on the subject. The meeting was promoted by Gilmar, who gave 24 hours for the parties to express themselves.
The States’ proposal includes 4 items:
- ICMS calculation base on diesel calculated based on the average of the last 60 months;
- non-binding of the general ICMS rate with the principle of essential fuel;
- application from 2024 of rates on fuel supply operations higher than rates on operations in general;
- removal of the Tust (Tariff for the Use of the Electric Energy Transmission System) and the Tusd (Tariff for the Use of the Electric Energy Distribution System) from the ICMS calculation basis, until the conclusion of the judgment on the matter, in the STJ (Superior Court of Justice).
Representatives of the Ministry of Economy, AGU (Attorney General’s Office), the Attorney General’s Office of the National Treasury, the PGR (Attorney General’s Office) and Conpeg (National College of Attorneys General of the States and the Federal District) also participated in the hearing. .
“After the work was started and a conciliation was proposed between the parties, it remained fruitless, for the time being”says the hearing term. “All the federative entities were able to express themselves, through their representatives, and it was agreed that the parties would manifest themselves within a period of up to 24 (twenty-four) hours. All were duly summoned.” read the intact of the document (119 KB).
A previous attempt at conciliation on the issue ended without an agreement. At the time, negotiations between the Union and States involved the adoption of single ICMS rates on fuel.
With the lack of conciliation, Minister André Mendonça, the rapporteur of the case, decided to partially comply with the government’s requests, and fixed the single collection of the fuel tax from July 1st. He also determined a series of rules, such as the adoption of the criterion of the essentiality of the products, which, in practice, limits the amount charged.
At the meeting held on Tuesday (June 28), state representatives criticized the measures approved in Congress that changed the way in which ICMS is charged. The rules established, for example, a single tax rate on fuels and a limitation on the collection of taxes on fuels, energy, communications and public transport.
States expressed concern about the drop in revenue.
The Comsefaz (National Committee of Secretaries of Finance) said at the meeting that the loss of revenue with the two laws amounts to around R$ 134 billion. He also stated that they would affect transfers to education and health.
The president of Conpeg and attorney general of Maranhão, Rodrigo Maia, stated that it would be possible to apply the average prices practiced in the last 60 months as the basis for calculating the ICMS on diesel.
The calculation had been fixed by Minister André Mendonça, in the decision in which he determined the single collection of the fuel tax.
Rodrigo Maia proposed the creation of a debate committee on lawsuits filed in the STF on the same topic. On the 3rd (June 28), governors of 11 states and the Federal District called the Court to question the law that limited the collection of ICMS on fuel, energy, communications and public transport.
There is also a lawsuit in which 11 states question the law that unified the ICMS tax rates on fuel.
Representatives of the federal government defended the constitutionality of the rules passed by Congress on the tax. They also stated that a conciliation on the subject was necessary.
Gilmar Mendes said that tax collection is not “an end in itself”. The minister mentioned that the issue demands a cohesive and harmonious action between the federative entities. “Financial resources exist to face the countless expenses that result from the fundamental rights guaranteed in our Constitutional Charter”he said.
The magistrate also cited the pandemic and the war in Ukraine as factors that weighed on the rise in inflation. Gilmar declared that other countries are also discussing ways to reduce fuel prices.
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