Government will advance R$ 10 billion to the states to compensate for the fall in ICMS

Lula Management

Around 75% of the amount will go to state administrations, while the other 25% will be sent to municipalities

Brasilia DF) – The Minister of Institutional Relations, Alexandre Padilha, confirmed, this Tuesday (12), that the federal government intends to advance R$10 billion to states and municipalities in order to compensate for the fall in ICMS. According to the portfolio holder, around 75% will be allocated to state administrations, while the other 25% will be sent to municipalities.

The compensation is described in the Complementary Bill (PLP 136/2023), presented to the National Congress by the Executive. The text predicted the start of payments for 2024. However, President Luiz Inácio Lula da Silva (PT) gave the approval for the matter to be changed with the anticipation of transfers for this year.

The measure is being processed urgently in Congress, and should be voted on in the coming weeks in the Plenary.

In total, the compensation will be R$27 billion by 2026. The second measure confirmed by President Luiz Inácio Lula da Silva (PT) was an increase in compensation from the Municipal Participation Fund (FPM) — funds sent by the federal government to city halls .

“In addition, we are putting in this PLP [Projeto de Lei Complementar] compensation for the drop in FPM that occurred in July, August and September. We will make an extra portion of this compensation”,

explained Padilha, after meeting with President Lula at Palácio da Alvorada.

According to the minister, the additional transfers to the FPM will be approximately R$2.3 billion.

Understand the transfers

The Complementary Law Project (PLP) nº 136/23, of the Executive Branch, regulates the compensation of R$ 27 billion to the states and the Federal District after changes last year in the collection of the Tax on Circulation of Goods and Services (ICMS) on fuels, electricity, communications and transport.

*With information from Metrópoles

Read more:

Government participates in the launch of the National Export Culture Policy in Brasília

Government announces emergency aid for cities affected by cyclone

USP predicts loss of 6.5% of budget with ICMS reduction