Governors ask Haddad to adjust fiscal recovery rules

Governors ask Haddad to adjust fiscal recovery rules

The governors of Goiás, Ronaldo Caiado, of Rio Grande do Sul, Eduardo Leite, of Minas Gerais, Romeu Zema, and of Rio de Janeiro, Cláudio Castro.| Photo: Rafa Neddermeyer/Agência Brasil.

The governors of Goiás, Minas Gerais, Rio Grande do Sul and Rio de Janeiro met this Wednesday (24) with the Minister of Finance, Fernando Haddad, to present a series of proposals that make the rules of the Fiscal Recovery Regime more flexible ( RRF). They argued that revenue losses over the past year have thwarted states’ ability to honor Union commitments.

Among the requests is the extension from 9 to 15 years of the maximum period of permanence in the program and a reduction in the debt correction index, among other adjustments, informed Agência Brasil. The states also ask for the possibility of expanding the space on their own revenues for the contracting of credit operations to be used in the payment of liabilities, such as precatorios (government debts definitively recognized by the Justice), in addition to carrying out investments in areas such as infrastructure, for example.

Of the four states, Goiás, Rio de Janeiro and Rio Grande do Sul already have their recovery plans in place, while Minas Gerais had its application for membership approved, but is still awaiting approval of the recovery plan by the Union. “Last year, the Union, through the laws [complementares] 192 and 194, took a substantial part of our collection. States lost billions of reais. Not only the billions of reais in financial income, but also our fiscal results were compromised. We are discussing alternatives to get around this”, said the governor of Rio Grande do Sul, Eduardo Leite (PSDB).

In June 2022, complementary laws 192 and 194 set a ceiling of 17% or 18% (depending on the state) for the Tax on Circulation of Goods and Services (ICMS) on fuel, energy, telecommunications and public transport. In March of this year, the Union and the states closed the agreement for the compensation of losses, in the amount of R$ 26.9 billion, to be paid by 2026.

Another request for change is in relation to the correction value of the states’ debts with the Union, currently made by the Extended Consumer Price Index (IPCA) + 4% per year or by the Selic Rate, which is 13.75% per year, whichever is bigger. According to the governors, the requests were well received by the Minister of Finance and will now be analyzed by the technical area of ​​the federal government. “We were very well attended, Minister Haddad is sensitive to our requests”, highlighted the governor of Minas Gerais, Romeu Zema (Novo).

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