States will reduce new ICMS on gasoline after agreement with STF – 03/30/2023 – Market

An agreement between the state governments and the STF (Federal Supreme Court) will change the implementation schedules of the new ICMS collection model for fuel. The states must also review the new gasoline rate, which was much higher than the amounts currently charged.

The states have not yet commented on the agreement, which should be formally confirmed this Friday (31). To the STF, they alleged difficulties in implementing the new model, which provides for the charging of a single national value in reais per liter and only from fuel producers.

The new diesel ICMS would come into effect this Saturday (1st) and will be postponed to May 1st. The one for gasoline would come into effect at the beginning of July and was brought forward to June 1st. In both cases, consumers should feel the effects of the new rates in their pockets.

In the case of gasoline, the rate announced on Wednesday (29) was R$ 1.45 per liter, much higher than the amounts currently charged —the highest ICMS on gasoline is charged today in Piauí, R$ 1.24 per liter. liter.

The value, however, will be reviewed at a meeting this Friday. A Sheet found that the current proposals are between R$ 1.18 and R$ 1.22 per liter, still above what is charged in almost all states. In São Paulo, for example, the current rate is R$ 0.90 per liter.

Economists Andréa Angelo and Felipe Salto, from Warren Rena, calculate that the change to BRL 1.45 could cause an average increase of 11.45% in the price of gasoline, with an impact of 0.5 percentage points on the IPCA projection for 2023 .

In the case of diesel, the new single rate of R$ 0.95 per liter is higher than the current average. According to consultant Dietmar Schupp’s estimate, the average price of the product would rise 2.1% with the adoption of the rate this Saturday.

But not all states would have a high: Sergipe, Amapá, Roraima, Pará, Bahia, Piauí, Maranhão and Rondônia now charge a higher value and would experience a drop in the final price.

The current ICMS collection model was criticized by the sector for feeding back price increases at refineries: after the rise in pumps, the states raise the reference price for charging the tax, generating a new transfer to the final consumer.

In addition, they say, it encourages tax fraud with the purchase of fuel in states where the ICMS is cheaper for clandestine sales in those with higher taxation.

The change was approved by Congress with the support of the Bolsonaro government in May 2022, but the states appealed to the STF.