Federal government must pay ICMS compensation in installments, say governors

Governors said this Tuesday (7) that the National Treasury intends to pay in installments the compensation for losses in collection of the Tax on the Circulation of Goods and Services (ICMS). They said they met with the Minister of Finance, Fernando Haddad. This Wednesday (8), the secretary of the National Treasury, Rogério Ceron, will discuss the measure with the state finance secretaries, informed Agência Brasil.

Compensation for losses with ICMS, a tax administered by the states, stems from last year’s complementary laws that limited the rates on fuel, natural gas, energy, telecommunications and public transport. The issue was discussed on the 27th by the governors of the 26 states and the Federal District and President Luiz Inácio Lula da Silva (PT).

According to the governor of Espírito Santo, Renato Casagrande (PSB), the federal government asked for the installments to occur within the four years of the mandate. He said that the amount to be compensated will be an intermediate amount between the R$45 billion requested by the governors and the R$13 billion to R$16 billion promised by the ordinance published in the last government.

Casagrande stated that the resources to compensate the states and the Federal District will come directly from the Union Budget. “We are well on our way with regards to offsetting the 2022 losses,” he said. “The compensation will be made, but the details will be defined tomorrow,” he added.

The governor of Rio Grande do Sul, Eduardo Leite (PSDB), estimated the revenue losses between R$ 30 billion and R$ 36 billion, of which the government of Rio Grande do Sul has R$ 7 billion to receive. The value is close to the R$ 36.9 billion projected by the National Treasury at the end of January. According to Leite, compensation is necessary to avoid damage to the population.

“The states were affected by a decision by Congress that affected ICMS collection. The result is that we have difficulty maintaining basic services to the population. We came here to discuss what compensation will look like going forward,” he declared.

The governor of Goiás, Ronaldo Caiado (União Brasil), said that the compensation will “oxygenate” the cash of the states and municipalities, which receive 25% of the ICMS collection. “We understand that the government, by distributing compensation in installments, is also assisting us when it helps us to obtain from the Supreme Court [Tribunal Federal] a favorable opinion on these issues,” he said.