Fernando Haddad celebrated the STJ’s decision to collect taxes.| Photo: Andre Borges/EFE

The Attorney General of the National Treasury (PGFN) asked Minister André Mendonça, of the Federal Supreme Court (STF), this Thursday (27), to reconsider the decision that suspended the result of the trial that could increase federal government revenue by up to Rs. $90 billion.

The petition contested the legitimacy of the Brazilian Association of Agribusiness (Abag) to act in the STF, and stated that the action suspended by Mendonça is unrelated to the case judged by the Superior Court of Justice (STJ) days before. The judges of the Court gave a favorable decision for the Union to charge Income Tax (IR) and Social Contribution on Net Income (CSLL) on ICMS tax incentives in the states.

“The granting of this injunction delays the outcome of more than 5,438 lawsuits, whose economic and financial impact is extremely high, as has been widely publicized in the press. The topic that is on the agenda of the STJ is one of the most relevant for the Brazilian State, either because companies are misinterpreting the infraconstitutional legislation and recording tax credits not provided for by law”, argued the attorney general’s office in a record by Agência Brasil.

According to the Ministry of Finance, several companies have used ICMS incentives to reduce the IRPJ and CSLL calculation base. Fernando Haddad even stated that the benefit encourages tax evasion by large taxpayers to the detriment of the tax-paying worker.