Source: Página Rural - RS - 10/11/2009

Sao Paulo / SP

The São Paulo State Finance Department changed the form of ICMS taxation for sugarcane and alcohol to try to reduce tax evasion in the sector, estimated at around R $ 1 billion per year.

As of December 1, sugarcane in stem, which was exempt from tax (deferred ICMS), will be taxed - the rate is 12%. And the alcohol plants and distributors will be obliged to register at the Fazenda São Paulo. If they do not, they will have to pay ICMS before the sale. Today an ordinance detailing the changes should be published.

Sefaz is considering extending this form of differentiated taxation to other sectors in which it has already identified irregularities in the payment of ICMS.

“As defaults and tax evasion are large in the sugar and alcohol sector, we made the decision to require the accreditation of plants and distributors. The documentation will allow an economic and fiscal analysis of companies and partners. Anyone who is in good standing will have a special tax regime. Otherwise, the company will be encumbered ”, says Otavio Fineis Jr., coordinator of the São Paulo Tax Administration.

In the State of São Paulo, there are 180 plants and 70 alcohol distributors - 140 distributors, but half have already been canceled due to registration and adulteration problems, according to the São Paulo tax authorities.

“The logic behind the change in taxation is that we will assign the responsibility for the payment of ICMS to the most reliable company, the one that is regular, be it a plant or a distributor. In the case of anyone who is irregular, we will demand that you pay the tax in advance, ”says Fineis.

The change in ICMS taxation for the sugar and alcohol sector is a reaction by the tax authorities to the “significant drop” in ICMS tax collection in the sector in the last year, according to Folha in August, Secretary Mauro Ricardo Costa (Fazenda de SP).

At the time, he stated that the sector received tax incentives from the State (the ICMS tax rate for alcohol is 12%, and for sugar, 7%, while most products pay 18%), which he did not face drop in sales and that there was no reason for the sector to collect less tax than in 2008, despite the global crisis.

Default in the payment of ICMS in the sector has doubled from 3,5% to 7% from the end of 2008 to 2009, according to Fineis. "In São Paulo, the ICMS tax on ethanol is 12%, and there are states that collect more than twice as much."

Plants and distributors that are regular with the tax authorities will follow the current tax payment rules that will be in force until the end of this month. That is, the distributor will collect the ICMS for its operation and that of the gas station - without having to collect it through special documents.

Plants and distributors that are not regular with the tax authorities will have to collect the ICMS through a special guide (Gare) in each operation. If a non-accredited distributor makes 30 sales to gas stations in a day, for example, it will have to fill out 60 guides (always one guide for its own operation and another to collect the ICMS from the station in advance).

Folha found that the union representing the distributors approved the measures.

Fátima Fernandes and Claudia Rolli