Budget 2025 does not include funds to reimburse incentives – 10/02/2024 – Panel SA

The Lula (PT) government did not include in the 2025 Budget proposal the resources from the first contribution to the Tax Benefits Compensation Fund, created in the tax reform to reimburse companies that, in the transition to the new system, will lose incentives already granted under the scope. of ICMS.

The money will be used from 2029, but the constitutional amendment says that the initial installment must be delivered to the fund next year. The value of the first transfer is R$8 billion, to be updated by the accumulated variation in inflation from 2023 to 2024.

The absence of the forecast in the Budget aroused the distrust of private sector actors regarding the government’s conviction that the reform regulations will be approved soon. It also raised criticism due to the insecurity generated among the companies that will receive the resources.

The fear is that the fund will become a kind of new Kandir Law, which instituted compensation from the Union to the states for ICMS relief on exports, but ended up becoming the center of a billion-dollar litigation due to the backlog of transfers.

Government technicians reject this risk, given that the expense was created by constitutional amendment and is therefore mandatory.

When contacted, the Ministry of Finance said that the bill regulating this contribution had not yet been sent to the National Congress and, therefore, did not include the amount in the Budget proposal.

The ministry also informed that the model under study “does not generate an impact on the primary result and on expenses subject to the limit in 2025”. Meeting fiscal targets has been one of the main challenges for Minister Fernando Haddad (Finance).

The compensation fund will receive, in total, R$160 billion over eight years (2025 to 2032), but payments to companies benefiting from tax incentives will start at R$16 billion in 2029, gradually rising until reaching R$64 billion in 2032. Before disbursements begin, the tendency is for contributions to be purely accounting.

The creation of this instrument was necessary because Congress validated ICMS tax benefits until 2032, but the tax reform provides for the state tax to be gradually reduced from 2029 onwards — which, consequently, reduces the gains obtained by companies. The government’s assessment was that it was necessary to provide legal certainty to the incentives already granted.

Idiana Tomazelli (interim) with Diego Felix

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