State government goes to STF to discuss loss of revenue

The non-incidence of ICMS on TUST and TUSD charges (Tariffs for the Use of Electric Transmission and Distribution Systems), determined by Complementary Law 194/2022, is causing a loss of revenue for Rio Grande do Sul and other states. The State Treasury Secretary, Pricilla Maria Santana, said that next Tuesday (7) a meeting is scheduled with the Minister of the Federal Supreme Court (STF) Luiz Fux to address the issue.

She reports that the exclusion of TUSD and TUST from the ICMS calculation base on electricity bills means a monthly reduction in revenue for the State of around R$ 240 million. “It is a number that we cannot do without and we are having this debate”, emphasizes the secretary. Pricilla argues that, at the very least, a transition period should be established for the State to deal with a loss of this magnitude.

This Tuesday (31) the secretary and governor Eduardo Leite presented the main fiscal data for Rio Grande do Sul for the past year. The budget result in 2022 was BRL 3.340 billion, against BRL 2.546 billion recorded in 2021, an increase of BRL 794 million. Revenue, last year, was BRL 73.153 billion and expenses of BRL 69.813 billion.

Among the factors that explain this positive performance are gains from privatization of state-owned companies. Only the sales of the generation area of ​​the CEEE Group (CEEE-G) and the Gas Company of the State of Rio Grande do Sul (Sulgás) meant a revenue of almost R$ 1.9 billion. By joining the Fiscal Recovery Regime, the State also made the contractual payments of its debt fall from R$ 5.1 billion to R$ 881 million. That is, R$ 4.3 billion were not paid in 2022

“We are treading a path that seems to me to be one of clear recovery and improvement”, says the secretary. Despite the good performance, Pricilla emphasizes that there are challenges to be faced in order to maintain the financial health of the State. Complementary Law 194, for example, as well as changing the rules on energy taxation, reduced ICMS rates on fuel and communications from 25% to 17%. This situation caused a nominal reduction of the ICMS in Rio Grande do Sul in the second half of 2022 of R$ 5.6 billion and the compensation for losses provided for in the legislation has not yet been implemented. In 2021, the accumulated tax in Rio Grande do Sul, between the months of July and December, was R$ 26.363 billion and in the same period last year it was R$ 20.769 billion.

As for the privatization of Companhia Riograndense de Saneamento (Corsan), which had the auction held in December last year, but with the sale contract expected to be signed in March 2023, Leite admits that the resources of this operation have not yet been accounted for as something already consolidated by the government. “We never count on any resource until it is made available in the cash”, emphasizes the governor.

Despite not being assured, as it is the subject of legal questioning, Leite is confident that the privatization of Corsan will be confirmed. He adds that, in addition to the resources that will come to the State with the measure, the prospect of improving sanitation in Rio Grande do Sul is very important, with investments in the order of R$ 12 billion that the new controller should contribute to the company’s operations. Control of the state-owned company from Rio Grande do Sul was acquired by the Aegea Consortium with an offer of R$ 4.15 billion.