The STF (Federal Supreme Court) approved on Friday (2.Jun.2023) the validation of the agreement in which the federal government undertakes to transfer R$ 26.9 billion, until 2026, to the States and the Federal District for losses in the collection of ICMS (Tax on Circulation of Goods and Services) caused by the exemption of fuels in the government of Jair Bolsonaro (PL).
The Court analyzed, in a virtual session, an agreement approved by the Minister of the Court Gilmar Mendes after rounds of negotiations between the Union and representatives of the States. Here’s the full from the vote of Gilmar Mendes (169 KB). He was accompanied by: Cármen Lúcia, Rosa Weber, Edson Fachin, Dias Toffoli, Alexandre de Moraes, Luiz Fux, Roberto Barroso and Nunes Marques. Minister André Mendonça accompanied the rapporteur with reservations.
The need for compensation was created after the approval, in June of last year, in Congress, of two complementary laws that exempted the ICMS levied on the sale of fuel, one of the main sources of revenue for the 27 federative units. The objective was to contain the increase in prices at the service stations.
The legislation provided for compensation to the States and the DF, but then-president Jair Bolsonaro vetoed the device. After Congress overturned the veto, the case ended up being taken to the Supreme Court.
Faced with the political and legal impasse, Minister Gilmar Mendes, one of the rapporteurs on the topic, created a special commission to promote a conciliation.
RULES
The Supreme decided whether to ratify the new amount for compensation, after the parties agreed on the estimated loss of revenue. Of the R$ 26.9 billion agreed, R$ 4 billion must be paid by the Union later this year. The remainder is for 2025 and 2026.
So far, states and the Federal District have already obtained preliminary injunctions (provisional decisions) from the Supreme Court to suspend around R$ 9 billion in installments of debts with the Union, in order to compensate for the loss with the exemption of fuels.
The agreement approved by a majority of the STF provides for rules so that the Union can also deduct this value from the total still to be compensated, according to the situation of each State. According to the Ministry of Finance, some units of the federation were able to compensate even more than they would have received. There are states that still haven’t achieved anything.
Of those who still have a balance to be received, the rules provide that States with up to R$ 150 million in compensation will receive 50% in 2023 and 50% in 2024, with funds from the National Treasury. States with compensation between R$150 million and R$500 million will receive 1/3 of the amount in 2023 and 2/3 in 2024. States with more than R$500 million will receive 25% in 2023, 50% in 2024 and 25% in 2025.
With information from Brazil Agency.
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