Governors of the South and Southeast want tax autonomy in the reform

governors of South and Southeast are mobilizing parliamentarians from the benches of their states to make changes in the text of the tax reform, which may go to a vote in the Federal Chamber later this week. This Tuesday (4) the heads of state executives are meeting in Brasilia with deputies from Paraná, São Paulo, Rio de Janeiro, Minas Gerais, Espírito Santo, Santa Catarina and Rio Grande do Sul to deliberate on a strategy of action, especially with regard to to the tax collection autonomy of the states.

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The states of the two regions form the South and Southeast Integration Consortium (Cosud), a cooperation group that brings together the agendas of the 7 states on different topics, including the economy. “Our states represent more than 70% of Brazil’s economy and can help the country a lot. We just don’t want to be disturbed and harmed”, says the governor of Minas Gerais, Romeu Zema (Novo).

For Zema, who was in Curitiba this week for an agenda with businessmen from Paraná, some aspects of the reform go against the interests of the states of the South and Southeast. The main point of contention is the proposal that involves the creation of a federal councilwhich would impact on the collection autonomy of states and municipalities.

The proposal is that the council be responsible for managing the collection of the new Tax on Goods and Services (IBS), which should unite the Tax on the Circulation of Goods and Services (ICMS), currently directed at the states, and the Tax on Services (ISS), directed at the municipalities.

“The collection of each state must remain autonomous. Paraná’s ICMS is here in Paraná today, Minas is there, and the last thing we want tomorrow is to have to go to Brasilia to discuss this amount that nobody questions today, because it belongs to each state”, emphasizes Zema.

Centralization is also criticized by the governor of São Paulo, Tarcísio de Freitas (Republicans), who has already summoned the leader of the São Paulo group in Congress, federal deputy Antônio Rodrigues (PL), and the mayor of São Paulo, Ricardo Nunes (MDB) , to discuss the matter.

Strategies on the agenda

The governors of the states of the South and Southeast, which make up Cosud, had already met last Friday (30th), by videoconference, to discuss points of convergence in relation to the proposal presented by the rapporteur for the reform, federal deputy Aguinaldo Ribeiro ( PP-PB).

And they took the opportunity to establish a strategy for today’s conversation with parliamentarians, on how to mobilize them to ensure that the final text of the collection proposal reflects the real weight of the states, taking into account the proportionality of populations – the 7 states add 56 .5% of the Brazilian population, according to the 2022 Census of the Brazilian Institute of Geography and Statistics (IBGE).

Cosud is coordinated by the governor of Paraná, Ratinho Junior (PSD-PR).

Regional Development Fund

Another aspect that is a point of contention for Cosud members is the FRegional Development Unitwhich would rely on Union resources to compensate for the loss of tax benefits granted to companies by the states, such as tax exemptions.

Measure that, for Zema, benefits the states of the Midwest, North and Northeast to the detriment of the others, since the Ministry of Integration and Regional Development already allocates resources to these regions through funds for this purpose. “Why not to the Southeast and South? Here we also have poverty”, he argues.

Governor Ratinho Junior has already positioned himself as a defender, along with the other governors of the South and Southeast, of the creation of a similar fund that specifically contemplates the two regions through reform. “The South and Southeast have been fighting for this fund for many decades. If this is not clear in the report, we will talk to our benches that this should be prioritized”, he said, in a meeting held in Brasília on the last 22nd with the president of the Chamber of Deputies, Arthur Lira, and governors and representatives of the 26 states and the Federal District.

For Zema, the alignment between the states should strengthen the negotiations, further encouraged by the recent formalization of the consortium – which until recently was an informal working group.

“All legislative assemblies are approving a bill in each state and we will have an office in Brasília, with a small structure, but which will act in favor of these states, remembering that other regions of Brazil already have similar consortia”, he points out.

Minas and Paraná

With specific regard to the two states, the governor of Minas Gerais states that the agenda with Paraná is focused on exchanging information about common projects. It is the case of road concessions and the privatizations in the energy sector.

Paraná has concessions planned for 6 lots of highways, 2 of which already have auctions scheduled for the second half of the year. Minas has 7 lots destined for private management, 3 of which have already been granted and another 2 with the forecast of launching public notices for this year.

Another agenda in which the government of Minas Gerais intends to expand the networking with the people from Paraná is in the change in the management model of the Cemig, the Minas Gerais energy company. State-owned with mixed capital, with the State as the main shareholder, the legal nature of the company is quite similar to that of copelthe Companhia Paranaense de Energia, which is in the process of being transformed into a Corporation. In this model, the State pulverizes the shareholding control, but maintains the veto power in decisions of public interest.

“We will have our own team here soon to monitor everything related to Copel because we want Cemig to follow the same path”, says Zema.