The text, submitted to the Senate, also establishes that the Union will make an additional transfer of R$2.3 billion to the FPM and R$1.6 billion to the FPE.
BRASILIA-A Room approved this Thursday the 14th the bill governing the agreement stipulated by federal government with the States to compensate for the losses with the collection of ICMS last year. In the basic text there were 349 votes in favour, 68 against and 2 abstentions. The proposal was sent to the Senate.
The project provides for an advance of R$10 billion in resources to states and municipalities, through direct transfers from the Treasury or debt reduction. The text also establishes that the Union will make an additional transfer of R$2.3 billion to the Municipal Participation Fund (FPM) and another R$1.6 billion to the State Participation Fund (FPE).
The initial text presented by the Executive regulated only the agreement stipulated between the Union and the federation bodies and approved by the Federal Supreme Court (STF), which provided for compensation of approximately R$ 27 billion to the bodies between 2023 and 2025 for ICMS losses last year – when former president Jair Bolsonaro sponsored the temporary reduction of state taxes on goods such as fuel, electricity, communications, in the midst of the election race.
However, under pressure from the mayors, almost a year before the elections, parliamentarians began to defend a solution in the project itself to increase the transfer of federal resources to municipalities for this year. The agreement included in the report was concluded in collaboration with the Ministry of Finance.
Of the R$27 billion foreseen by the legal agreement between the Union and the States, approximately R$9 billion was compensated due to judicial decisions. Of the remaining R$18 billion, approximately R$15.64 billion will be compensated through reductions in the amounts of state debt installments and R$2.57 billion through direct transfers to the States and the Federal District. Municipalities are entitled to a constitutional share of 25% (which amounts to R$18 billion) of the amount owed to each state.
To satisfy the mayors, the project provides that the amounts of compensation for ICMS losses expected for 2024 will be brought forward to this year through a direct transfer by the Union, either through direct transfer or debt reduction – the so-called “accounts meeting”. The total amount transferred will be R$10 billion.
“The measure is useful to the States, the Federal District and, in particular, the municipalities, which have suffered from the decline in revenues and legal transfers due to measures such as the correction of the income tax table”, reads the text . The advance does not change the compensation calendar expected for 2025.
The bill also requires states to demonstrate 25% transfer by municipalities. Even if the federative body has benefited from the debt reduction, the appeal must be addressed directly to the municipalities. The rapporteur also included in the project an amendment to oblige the Union to directly transfer the share due to the municipalities if the States do not do so within 30 days.
In addition to the advance, the text also provides for the coverage of FPM’s real losses in July, August and September of this year, in the amount of R$2.3 billion. The report also establishes that, at the end of 2023, the Union will top up the fund’s resources if there is evidence of an effective reduction in the transfer taking into account all months of the year.
In the case of the FPE, the value of the recomposition will be 1.6 billion reais to mitigate the revenue losses of the federation bodies in the months of July and August of this year, after the negotiations conducted today by the rapporteur with the leaders of the parties of the Room. The Speaker of the Chamber, Arthur Lira (PP-AL), expressed his disappointment at the inclusion of this measure, but Zeca managed to reach an agreement.
Fuels
The project’s rapporteur, MP Zeca Dirceu (PR), who is also the leader of the PT in the Chamber, once again denied that there is a loophole in his text that allows federation bodies to increase the ICMS tariff applied to fuel.
“I wanted to clarify that some things are repealed at the end of the text, but at no time does the taxation of the ICMS, its essential nature, change. Never, with this law, will any State be able to impose more than 18%. It can never be changed [com o projeto] the way the tax rate is applied,” Zeca said.
In the original version of the bill, a loophole allowed states to increase the rate. But the text was modified by the rapporteur, after the negative repercussions revealed by Station/Broadcast.
Source: Terra

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