Starting in the legislature, the end of the Fiscal War is possible.

By ETCO
09/12/2014

By Evandro Guimarães, President of ETCO

The parliamentary recess is approaching, but there is still an expectation that the Senate will vote this year on a bill that helps in the effort to end the fiscal war between states. Those who defend the approval recall that the new governors will be able to take office on January 1 with a new orientation, which can help a lot in the development of the country as a whole.

The expectation comes from November 4, when the Senate Economic Affairs Committee (CAE) approved the fifth substitute presented by Senator Luiz Henrique (PMDB-SC) to the original project of Senator Lúcia Vânia (PSDB-GO), PLS130 / 14. The substitute authorizes the National Council for Farm Policy (Confaz) to validate the tax incentives granted to States, even without unanimous decision, as required today.

Senator Luiz Henrique's substitute avoids the risk of unconstitutionality of the bill presented in April (PLS 130/2014), by Senator Lúcia Vânia (PSDB-GO) and predicts that an agreement for the validation can be signed with the support of two thirds of the federated units and one third of the federated units in each of the five regions of the country. The change in quorum applies only to the validation of tax incentives, forgiveness of tax credits arising from disputes between States and eventual reinstatement of benefits.

This approval is the initial step towards pacifying the issue of tax incentives through legislation. ETCO defends the immediate mobilization of parliamentarians for the end of the fiscal war, as the solution must be sought in Congress, where an agreement is possible, with concessions between the interested parties, as was the case in CAE.

The vote on PLS 130/14 can avoid the resolution of the fiscal war by the Federal Supreme Court (STF). The Supreme Court has already ruled in 29 Direct Unconstitutionality Actions (ADIs) that incentives granted without the consent of Confaz are unconstitutional and may place the Binding Summary Proposal 69 on the agenda. The text considers the ICMS tax incentives granted without prior unanimous approval to be unconstitutional. do Confaz. If the Binding Summary is edited, all the organs of the Judiciary and the direct and indirect public administration, at the federal, state and municipal levels, are obliged to adopt this consolidated STF orientation.

This situation - of a bill pending in the Senate and a binding summary that can be edited - causes legal uncertainty that results in paralysis of investments in the country. clear for future incentives, companies have left projects aside.

Shortly after approval by the CAE, the Confaz Coordinator, José Barroso Tostes Neto, stated that the agreement to vote on the substitute was possible because the government was willing to start discussions for the reform of the ICMS. The creation of Regional Development and Compensation Funds is essential to compensate for losses by States.

The path of the new federative pact is outlined and the first step has been taken. It remains to advance the approval of the text that legalizes the tax incentives created by States and the Federal District and, subsequently, the ICMS unification projects and the creation of funds, so that the instruments to stimulate development are all aligned.

Evandro Guimarães, CEO of ETCO
Evandro Guimarães, CEO of ETCO