President of the National Confederation of Municipalities said that approval of the PLP is a “coup” to the federation
THE CNM (National Confederation of Municipalities) said this Wednesday (June 15, 2022) that the approval of PLP (Complementary Law Project) 18/22 in Congress represents “a blow to the federation”. According to the institution, the proposal will cause “one annual loss of about R$ 80 billion” for states and municipalities.
In a note, the CNM criticizes the project that determines the application of ICMS rates on the floor for essential products and services when incident on goods and services related to fuels, natural gas, electricity, communications and public transport. In most states, this floor is 17% or 18%.
“The municipal movement regrets that, in an extreme act of fiscal and social irresponsibility, the approved text removed a mechanism that would provide some compensation, insofar as the effect of high inflation on ICMS revenue will mask the real loss caused by the drop in tax rates. ”said.
The institution that represents the municipalities says that the Union will collect in 2022 “about R$40 billion in royalties and special participation” and “at least R$32 billion in dividends from Petrobras in the 1st semester alone”. According to the CNM, these resources would be enough to compensate states and municipalities.
The CNM also says that the PLP “will have a small impact on fuel prices”. It also states that the mayors will monitor “the prices charged at the gas stations before and after the change in the rate”.
The Chamber of Deputies approved this Wednesday (June 15) the Senate amendments to the project. Now, the text will be sent for presidential sanction.
On June 7, the CNM criticized the president’s proposal Jair Bolsonaro (PL) in compensating States for zeroing fuel taxes. The institution’s president, Paulo Ziulkoskicalled the initiative “irresponsible”.
Here is the full text of the note released this Wednesday (June 15):
“The approval by the National Congress of the Complementary Law Project (PLP) 18/2022, which permanently reduces ICMS rates, represents a blow to the Federation. The measure will result in an annual loss of around R$ 80 billion to state and municipal coffers.
“The National Confederation of Municipalities (CNM) understands that reducing the tax burden involves the “sacrifice” of the three Entities, but what can be seen, in this and other measures approved by Congress or announced by the government, is that the bill weighs excessively on the Municipalities, where life happens and the population demands essential services such as school meals, school transport, health, social assistance and sanitation.
“The municipal movement regrets that, in an extreme act of fiscal and social irresponsibility, the approved text removed a mechanism that would provide some compensation, insofar as the effect of high inflation on ICMS revenue will mask the real loss caused by the fall in taxes. aliquots. In this way, the loss of revenue for States and Municipalities will be greater than that produced by the Kandir Law.
“The Union is profiting from the rise in oil prices and should collect around R$40 billion this year in royalties and special participation, in addition to at least R$32 billion in dividends from Petrobras in the first half of the year alone. This resource would be enough to compensate States and Municipalities for the permanent loss. This is compounded by the fact that it will probably have a small impact on fuel prices.
“In order to verify whether this reduction will actually reach the Brazilian population, the CNM called on municipal managers to monitor the prices charged at gas stations before and after the rate change. After all, who will pay the bill? The action will confirm whether it was the poorest population in the country who again paid the bill at the expense of an electoral measure.
“Paulo Ziulkoski
president of CNM”
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