20 states and DF raise ICMS in the country; see which taxes have increased

With empty coffers, states and capitals raised tax rates.
Federal government raised IPI and ended exemption of remittances abroad.


Inflation will not be the only villain in taxpayers' pocket in 2016. With losses in revenue, the federal government and most states and capitals raised their main taxes, according to a survey carried out by the G1.

The survey considered only the rate increases - the percentage used to calculate how much the taxpayer will pay in tax on the value, in reais, of a certain product, service or asset.

They were left out, which reflect only the effects of inflation on the prices of products or services - a 10% tax on a product, for example, which cost R $ 100 a year ago, would then bring R $ 10 to the government coffers. That same product, costing R $ 110, would now pay R $ 11 in taxes, without changing the rate.

In the case of property taxes, such as IPVA (incident on vehicles) and IPTU (on real estate), in many cases there was no change in the rates, but with the correction of the value of these assets (due to inflation or devaluation), the final value of the taxes changed.

Main taxes
The rate of the Tax on Circulation of Goods and Services (ICMS), for example, increased in 20 states, in addition to the Federal District. The state tax is one of those that weigh the most and focuses on products and services considered essential, such as telephony and telecommunications, and also superfluous ones, such as cosmetics, alcoholic beverages and cigarettes.

Source: G1 (12/01/2016)

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New ICMS makes life difficult for small online stores, tax experts say

Division between states forces traders to make complex calculations.
Small Simples retailers will find it more difficult to adapt.

Many companies were taken by surprise by the rule of sharing the ICMS (Tax on the Circulation of Goods and Services) between the states, in force since the beginning of the year. Small businesses - especially those that operate in e-commerce and adopt Simples Nacional - will have more difficulties in adapting, assess tax experts heard by the G1.

Under the new rule, a São Paulo store that sells national wines over the internet to a consumer in Piauí now needs to share the tax collection with the state that receives the goods (see explanation below).

Source: G1 (18/01/16)

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Special calendar for PEC approved that creates funds against regional inequalities

The Senate Plenary approved on Wednesday (9) a special calendar request for the processing of the Proposed Amendment to the Constitution (PEC) 154/2015, which creates the National Regional Development Fund. The proposal, by Senator Walter Pinheiro (PT-BA), destines part of what is collected with the repatriation of resources for the creation of the fund.

The PEC also creates a compensatory fund for the states, with a duration of eight years, aiming at the unification of the rates of the Tax on Circulation of Goods and Services (ICMS).

Repatriation of resources

The matter should be included in the agenda for the deliberative session next Tuesday (15) and be considered in the agenda that also provides for the vote on the project that regulates the return of funds held abroad that have not been declared to the Federal Revenue (PLC 186 / 2015).

The repatriation project is of constitutional urgency and its approval must guarantee the necessary resources for the constitution of the funds.

Source: Agência Senado (9/12)

ICMS -SP - Government alters tax rates and creates Fund to Combat Poverty

ICMS -SP - Government alters tax rates and creates Fund to Combat Poverty - Blog Skill


Through Law No. 16.005 / 2015 (DOE-SP 25/11), the São Paulo government reduced the ICMS on generic drugs from 18% to 12% and increased the beer and draft rates from 18% to 20%; and smoking from 25% to 30%.

The governor instituted through Law nº 16.006 / 2015 (DOE-SP 25/11) the State Fund for Combat and Eradication of Poverty - FECOEP, which will have a rate of 2% and will be charged in operations with the following goods:

  1. a) alcoholic beverages classified under heading 22.03 (beers and draft beer);
  2. b) tobacco and manufactured tobacco substitutes, classified in chapter 24.

The new rules will be applied within 90 days from the publication of the Law.

Alckmin proposes higher VAT on beer and tobacco and lower ICMS for food

Part of the additional revenue from superfluous goes to fight poverty.
Governor also reduced taxes on medicines, rice and beans.

The governor of São Paulo, Geraldo Alckmin (PSDB), sent to the Legislative Assembly this Wednesday (28) a package of measures that proposes to increase the rates of the Tax on Circulation of Goods and Services (ICMS) for cigarettes and beer and a reduction the same tax on generic drugs. By decree, the governor zeroed the ICMS on rice and beans and reduced the tax on sand used in construction.
The package also includes the creation of a state fund to fight poverty. This fund will be supplied with approximately R $ 1 billion generated with the increase in the superfluous tax. Another R $ 1 billion will be allocated to the state treasury and R $ 500 million to the municipalities. The governor also proposed the creation of a debt installment program (PPD).


Source: Globo G1 (28/10)

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Tax Reform Report will provide compensation for unification of ICMS

However, the committee chairman did not say how much the tax rate will be.

The chairman of the Special Tax Reform Commission, deputy Hildo Rocha (PMDB-MA), anticipated that the final report by deputy André Moura (PSC-SE) will provide for the creation of a fund to compensate states for eventual losses in tax collection resulting from the unification the legislation on the Tax on Circulation of Goods and Services (ICMS).

Photo by: Agência Câmara Notícias - Gustavo Lima


“There is a forecast, within our global agglutinative PEC, to compensate for the state that may lose. Of course, in a change like this, someone will lose, but we are creating a Revenue Equalization Fund for no state to lose. This will come from the resources of the IPI (Tax on Industrialized Products), the Income Tax ”, he said.

Unification of rates 
The unification of the rates is one of the main points of the report that, according to Rocha, will be voted on in November by the Special Committee and until the end of the year in the plenary of the Chamber. However, the committee chairman did not say how much the tax will be.

Today there are 27 different state legislations on ICMS and many states, mainly in the Midwest and Northeast, charge lower rates to attract companies to their territories, the so-called “fiscal war”.

In 2008, a substitute presented by former deputy Sandro Mabel already predicted the end of the fiscal war and the unification of the rates, bringing together several proposals on tax reform (PECs 233/08 and 31/07, among others).

The substitute proposed by Mabel was approved by the special commission but was not analyzed at the Plenary of the Chamber, mainly because it faced opposition from states that considered themselves harmed.

According to the committee chairman, there is still opposition. He guarantees, however, that most states support the measure. "Some states in the Midwest region stand against the end of the fiscal war, against the single legislation for this tax, which is one of the most complex we have," he said.

Finance Offices
The proposal for a fund to compensate states that lose revenue was presented in August, in the Chamber, by representatives of state finance departments. They defended the inclusion of the fund in the Constitution - and not through a Provisional Measure, as the government intended.

To try to reach consensus, the commission held public hearings in several states to hear the opinion of businessmen and representatives of governors. Last Monday (26), the deputies were at the headquarters of the Federation of Industries of Maranhão (Fiema), in São Luiz (MA), where they heard suggestions from businessmen.

The vice-president of Fiema, Cláudio Azevedo, said that, in general, the entity's proposals are the same as those formulated by the National Confederation of Industry: harmonization of the ICMS, IPI, PIS and Cofins calculation base, unification of the ICMS legislation and reduction of the tax burden.

In addition to the unification of the 27 state ICMS laws, the proposal that will be presented by deputy André Moura also foresees the replacement of taxes such as Cofins, PIS, Cide-Combustível and the education salary with the Value Added Tax (VAT) provided in PEC 233/08, presented by the Federal Executive.

“With VAT, what is intended is to end the cumulative nature of taxes throughout the production chain, since products are taxed even when one is used in the manufacture of another. In addition, VAT will also be shared with states and municipalities, ”said André Moura, on his personal website.

In August, at a public hearing of the commission, economist André Alencar, of the National Confederation of Municipalities (CNM), said that the unification of the Service Tax (ISS) with the Tax on the Circulation of Goods and Services (ICMS) to create a State Value Added Tax (VAT) would only be possible if there was no decrease in resources for the municipalities.

Source: Agência Câmara Notícias (28/10)

São Paulo will tax software downloaded from the internet

ICMS, which was charged only on programs sold on CD or DVD, will be charged on download sales starting in January

The government of the State of São Paulo will soon change the rules for taxing software, whether in the sale of products recorded on physical media (CD or DVD), or when the license is delivered to the consumer through download. According to decree nº 61.522, published on September 29 by Governor Geraldo Alckmin (PSDB), the rate of 18% of the Tax on Circulation of Goods and Services (ICMS) will be levied on the sale of software, whatever the means of delivery, from January 2016.

Currently, in the case of programs sold on physical media, the government already collects ICMS, but the 18% rate is calculated at double the value of the physical support (CD or DVD), as decree nº 51.619, of February 27, 2007. “Taxation is calculated based on support, which ends up generating negligible value”, says Ivan Ozawa Ozai, deputy director of the tax consultancy at the São Paulo Finance Department. According to him, the government's objective is to align the ICMS taxation to that adopted in other states.

By Thiago Sawada

Source: Estadão (08/10)

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Poorer municipalities want different treatment in tax reform

The poorest municipalities in the country want different treatment in tax reform. Mayors of the so-called G100, a group that brings together populous municipalities with low per capita income and high socioeconomic vulnerability, presented demands, on Thursday (20), to the Special Tax Reform Commission.

The vice president of the National Front of Mayors for Social Policies, Elias Gomes, complained about the distribution of ICMS, which, according to him, favors municipalities with greater economic dynamism. He is the mayor of Jaboatão dos Guararapes, first on the list of the most vulnerable in Pernambuco, the state with the largest number of municipalities in this situation, 18 in total.

Constitutionally, 25% of the state VAT collection is transferred to the municipalities. The participation index that establishes the percentage that each one will be entitled to is based on the value added tax (VAF), which corresponds to what is economically produced in the municipality. "In general, the cities of the G100 have low economic dynamism, therefore, low VAF, which results in a small slice of the ICMS compared to the size of their populations", explained Elias Gomes.

Municipalities Fund
Likewise, the Municipality Participation Fund (FPM), favors smaller cities. Elias Gomes suggests changes in the distribution criteria to improve the per capita income of these municipalities.

“The tracks inside the FPM are completely oblivious to a fair distribution. For example, municipalities between 100 thousand and one million inhabitants have a certain percentage of participation, so that my neighbor with 110 thousand inhabitants also receives us, who have 700 thousand inhabitants ”, explained Elias.

“This builds inequalities. So, the staggering is less, for every 50 thousand inhabitants, and, with that, justice is done, and the tax is meaningless if it is not to finance people's lives, development, and quality of life ”, he added.

Revenue per capita
Data from the National Front of Municipalities yearbook show that the average per capita revenue of the G100 municipalities is half that of the other municipalities (R $ 1,3 thousand against R $ 2,6 thousand).

Small municipalities with up to 10 inhabitants receive up to five times the amount that the G100 municipalities receive from the FPM, per inhabitant (R $ 1,2 against R $ 250).

Likewise, ICMS revenue per inhabitant in the G100 municipalities is less than half that received by the other municipalities (R $ 219 against R $ 580).

Disordered growth
“You cannot treat unequal people equally. At this rate, we will reach the same level as the other municipalities in 100 years ”, argued Elias Gomes, recalling that the G100 is part of the municipalities that grew rapidly and in disarray in the peripheries of large cities.

“The per capita income of the municipality next to mine, which explores the Port of Suape is 1300 reais, while ours is 180 reais”, lamented the mayor of Pernambuco.

Congressman Luiz Carlos Hauly (PSDB-PR) considers that the collection of municipalities is poorly explored and suggests changes: “I personally understand that the ISS should join the ICMS and federal consumption taxes - PIS, Cofins e IPI - and make a single base and a single collection of a single national federal tax authority, of states and municipalities in society ”.

The idea, according to him, “is not for each one to have a unit, but to increase the potential of this collection, because if you are very close to the population, you cannot increase the IPTU, ISS, IPVA, but when the federal revenue increases , it is distant, it is diluted, diffuse ”.

The mayors also showed that, in relation to other taxes, the G100 municipalities are also at a disadvantage. ISS per capita revenue is four times lower than that of other municipalities. IPTU is five times smaller. And the Gross Domestic Product (TAX ID No) per capita of these cities is 1/3 of the others.

% Of the population 12
The author of the hearing request, deputy Orlando Silva (PCdoB-SP), points out that the G100 municipalities concentrate 12% of the Brazilian population and that, if treated differently, they can improve Brazil's social indicators. “We need to establish equalization mechanisms for social justice. The FPM can be that instrument ”, he evaluated.

Special service
Lucimar Nascimento, mayor of Valparaíso de Goiás and vice president of the FNP for Health Surveillance, defended differentiated service to the municipalities of the G100 with the reduction of bureaucracy to obtain financing from the BNDES. She also called on the commission to review the distribution of ICMS in the Tax Reform.

The objective, he stressed, is to provide “a new equalization that reduces the time for the G100 to be equal to other municipalities”. She recalled that, of the seven municipalities in Goiás that are part of the G100, five are in the vicinity of the Federal District, a few kilometers from the federal capital.

Carlos Farias, Secretary of Economic Development of Araçatuba, considered that the changes could be made gradually to minimize the impact on other municipalities.

Report - Georgia Moraes
Edition - Newton Araújo


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