Rio Grande do Sul will be compensated in R$ 3 billion for ICMS losses

After the announcement by the Ministry of Finance of the Union’s agreement with the Brazilian states on the compensation of BRL 26.9 billion due to ICMS collection losses, the government of Rio Grande do Sul confirmed that the State will receive R$ 3.02 billion of this amount.

After months of negotiations between RS, federal government, National Congress, Federal Supreme Court (STF) and other states, the Union announced a unanimous agreement for reimbur*****t for the reduction of ICMS rates that occurred in 2022 due to Complementary Law 194/2022.

“This will provide better conditions for fulfilling the State’s obligations so that we can guarantee, in addition to paying bills on time, investments for society in Rio Grande do Sul. We are always focused on maintaining the balance of the accounts and I salute the initiative of the federal government, especially of the (Finance) Minister Fernando Haddad (PT), who was always willing to have a good dialogue and who helped us, with his composition skills, to to reach this good result”, said the governor of Rio Grande do Sul, Eduardo Leite (PSDB), according to a note released by the Piratini Palace this Friday afternoon.

Of the total agreed, part has already been compensated through injunctions granted by the Federal Supreme Court (STF) to debtor states of the Union. According to Haddad, the rest will be deducted from the debt installments or paid to states with small debts or even without liabilities until 2026. Rio Grande do Sul, as it is in the Fiscal Recovery Regime (RRF), will be able to deduct these amounts from installments to be paid from 2023 up to the amount of 3.02 billion.

“Part of this amount has already been offset and another portion is being diluted so as not to have an impact on the Union’s accounts this year and to be accommodated in the targets already announced since January”, explained the Minister of Finance this Friday afternoon (10). About R$ 9 billion have already been compensated through injunctions to debtor states of the Union.

According to the Secretary of State Finance, Pricilla Santana, the conversations have advanced in recent days because there is a federative interest in this matter, which is related to the past year, to be urgently overcome, preserving the interest of the states and allowing the country to move forward. for a necessary discussion on Tax Reform.

“The fact that Rio Grande do Sul is in the RRF, as well as other states, will allow for better planning of its financial flow this year”, evaluated the Treasury holder, according to the state government’s communication office. Pricilla highlighted the leadership of the governor and teams from the State Attorney General’s Office (PGE) and the Treasury itself, in particular the State Revenue, for the achievement of the agreement.

The stock of the State’s debt with the Union, on which the Tax Recovery Regime was agreed, was R$ 82.5 billion at the end of 2022. The plan, which provides for the payment of this amount in installments, is valid until 30 December 2030. The RRF entered into force on July 1, 2022.

The possibility of reimbur*****t of ICMS losses through the reduction of debt installments had been anticipated by Milk at a press conference on Wednesday (8), when the governor stated that a review of the Regime was inevitable – after all, the tax nature on which the agreement was sealed was changed by Complementary Laws 192 and 194, which reduced the ICMS rates on fuel, electricity, public transport and communications.

Leite said that the agreement was possible because the Union itself caused the collection losses, which impacted the fiscal forecasts of all states in the country. “Due to the Union’s decision to force tax cuts at the state level. Everyone wants to pay less tax, but the State has to pay its bills at the end of the month and there was, on the part of the Union, a decision to force tax cuts that took R$ 5 billion a year from Rio Grande do Sul. Therefore, the Union opened a dialogue to compensate for the losses and we arrived at this composition”, said Leite, in an audio sent by the Executive Branch communication.

Including commitments with the federal government, the Inter-American Development Bank (IDB), the National Bank for Economic and Social Development (BNDES), Banco do Brasil and the Municipal Department of Water and Sewage (DMAE), Porto Alegre and Precatorios, the consolidated debt of the Rio Grande do Sul reached BRL 109.7 billion in 2022 – an increase of 11.6% compared to 2021.

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