Source: SETCESP - 24/05/2010

The government of Paraná is considering adopting two measures this year with the objective of containing the fiscal hemorrhage in the fuel distribution sector. The first change should be in the system for calculating the Tax on Circulation of Goods and Services (ICMS) on ethanol. Another proposal is to concentrate the entire collection of the product tax in the plants, under the system of tax substitution, and no longer in the distribution, which today is responsible for more than 60% of the taxes paid by the sector.

Currently, the 18% ICMS rate is based on an added value margin (MVA) - thus, the tax is charged on the plant's price plus an assumed margin on the final value of the product to the consumer. In this case, if the price is under-invoiced, the tax is reduced, and therefore there is tax evasion. In order to try to reduce the possibility of fraud, the tax should now be calculated based on the weighted average price to the final consumer (PMPS). If adopted, the measure should have an immediate impact of approximately R $ 6 million per month on the collection, totaling R $ 72 million per year.

The proposal to transfer the tax substitution to the plants is more controversial. “It would be an advantage. While a distributor is set up not to collect taxes, in the case of a plant, it is different: no one can open a facade plant. In addition, these are companies that have tangible assets ”, defends the vice president of the National Union of Fuel and Lubricant Distribution Companies (Sindicom), Alísio Vaz. Representatives of producers, however, consider that the concentration of taxation at the beginning of the chain could burden the sector excessively, making the operation of plants that already work with a high level of indebtedness unfeasible.

The measures can be adopted via a decree of the state government or through a bill sent to the Legislative Assembly of Paraná, a less likely hypothesis. According to the inspector general of collection of the State Secretariat of Finance, Rafael Casanova, the studies are "mature" and the changes should occur "soon, even before the end of the year".