Mobilization to end the fiscal war

Evandro Guimarães, president of ETCO and Eduardo Cunha (PMDB-RJ), president of the Chamber of Deputies
Evandro Guimarães, president of ETCO and Eduardo Cunha (PMDB-RJ), president of the Chamber of Deputies

ETCO and a group of political, business and worker leaders met yesterday (10/06) with the president of the Chamber of Deputies, Eduardo Cunha (PMDB-RJ), to reiterate the request for commitment in the approval of PLP 54 / 2015, which deals with the validation of tax incentives and the remission of past debts of the States related to differences in ICMS rates.

“We are committed to the search for an appropriate, transparent and negotiated policy for the issue of regional development and for the issue of tax incentives related to the ICMS. The effective processing of PLP 54 is an important step that facilitates the progress of other measures for the solution of the fiscal war and, for the resumption of regional investments ”, said Evandro Guimarães, president of ETCO.


Senate approves validation of tax incentives with two amendments

Photo: Moreira Mariz / Agência Senado
Photo: Moreira Mariz / Agência Senado

After weeks of intense discussion between parliamentarians and negotiations with the Ministry of Finance, the Senate Plenary approved on Tuesday (7) the validation of tax incentives granted by states to companies. There were 63 votes in favor, 7 against and 1 abstention. Two amendments presented at the Plenary were incorporated into the text, which now goes to the Chamber of Deputies.

PLS 130/14, by Senator Lúcia Vânia (PSDB-GO), validates the tax benefits (generally related to ICMS) that states offer companies to settle in their territories, generating jobs and income and promoting growth economic.

To grant the benefits, it is necessary to obtain unanimous agreement from the other states in the National Council for Farm Policy (Confaz). Over the years, many incentives have been offered that do not comply with this standard. Competition between states in the concession is known as "fiscal war".

After the approval of PLS ​​130, the Plenary rejected the request for inversion of agenda presented by senators from São Paulo, Marta Suplicy (PT), Aloysio Nunes Ferreira (PSDB) and José Serra (PSDB). PLC 15/2015 - complementary, which changes the state debt index, remains as the third item on the agenda, after the draft Biodiversity Law (PLC 2/2015).


The convalidation bill, which had already been approved last year by the Economic Affairs Commission (CAE), was voted as a substitute offered by the rapporteur, Senator Luiz Henrique (PMDB-SC). In addition to regularizing all existing tax incentives, the text changes the rules for offering new ones, ending the requirement for unanimity in Confaz. Now, the consent of two thirds of the states or one third of the states of each region is required.

Rules are also presented that the benefits granted must follow from the new measures, as conditions for their validity and maximum term that the concession can last.

Two amendments, by Lúcia Vânia and Senator Ricardo Ferraço (PMDB-ES), were approved to complement the project. Ferraço's amendment highlights the incentives granted for commercial activities, which may extend for up to five years. In the previous version of the project, only one year was allowed.

Lúcia Vânia's amendment, on the other hand, cancels the punishments provided by law for states that granted incentives without authorization from Confaz. These punishments will be removed in the case of debt forgiveness of the companies receiving the benefits. The objective is to prevent companies from having to pay ICMS if the incentives they received are considered illegal. The project also seeks to prevent the unpaid ICMS from the states of origin being subsequently charged by the states of destination.

Next Steps

The president of CAE, Delcídio do Amaral (PT-MS), warned his colleagues that it is necessary not to close the matter only in the approval of the validation. According to him, it is necessary to think about a broad reform of the ICMS

- We have a big homework ahead of us. The ICMS reform is 70% of the tax reform. It passes through the Senate, the federal government, the states and Confaz. It needs to be a negotiated solution. The decision does not end in today's session - he warned.

Senator Ronaldo Caiado (DEM-GO) was concerned about the pace of processing the proposal in the Chamber. He proposed to condition the quick analysis of the validation by the deputies to the approval, in the Senate, of the new index of the debts of the states and municipalities. Thus, he believes, it will be possible to guarantee agility.

- We only have one condition to make her walk in the Chamber: we link the approval to the vote here on the debt renegotiation. Otherwise, we will approve the validation here, it would arrive at the Chamber, it would not have continuity, and our states [would be] unable to react - he asked.


The only abstention recorded in the vote was that of the project's own rapporteur, Luiz Henrique. He said he held a meeting with Confaz, about a month ago, in his office. In it, the members of the council asked him that an eventual decision by the Senate would wait until the 11th, when the state finance secretaries will try to reach a consensus on the subject.

As the Senate vote took place earlier, said the senator, his abstention vote would be a way to honor the agreement with Confaz.

- Although I was the original rapporteur for the matter that reached the Senate, my vote will be abstention. It is the vow to keep my word - he justified.


Source: Agência Senado (07/04)

Senate approves urgency to validate tax incentives

Photo: Moreira Mariz (Agência Senado)
Photo: Moreira Mariz (Agência Senado)

The Senate Plenary approved last Wednesday (25) the entry into an emergency regime of PLS ​​130/2014, which promotes the validation of tax incentives granted by states to companies. As a result, the project gains priority to be voted ahead of others and is no longer subject to regulatory formalities such as deadlines and interstices, and may be completed more quickly.

The decision to put the project in urgency was taken at a meeting of senators with the Minister of Finance, Joaquim Levy, this morning. The forecast now is that the proposal will already be put to a vote next week.

- This decision is a wise decision and I hope that the project will be approved as quickly as possible - celebrated Senator Luiz Henrique (PMDB-SC), rapporteur of the matter and author of the substitute that will be voted by the Plenary.

The validation will represent the regularization of tax benefits that the federation units grant to companies so that they can establish themselves in their territories, generating jobs and income and promoting economic growth. Many of these benefits were offered in disagreement with current rules, which senators consider very strict, and there is competition between states in the concession - a phenomenon that is known as "fiscal war".

- This debate started back there. It has to do with regional development and strengthening the economies of emerging states. Not validating them puts at risk a whole set of tax incentives that benefited the country's economic deconcentration - commented Senator Ricardo Ferraço (PMDB-ES).

For a state to be able to grant tax benefits to companies, it is necessary to obtain unanimity among all units of the federation in the National Council for Farm Policy (Confaz). For Senator Delcídio do Amaral (PT-MS), president of the Economic Affairs Commission (CAE), this rule benefits states like São Paulo and Rio de Janeiro, which are more attractive to companies and can veto the incentives promoted by others on their own.

- The other states are concerned with the validation, which is a threat over the heads of all units of the federation. We cannot lose this agenda - he urged.


Ferraço defended the need for the Senate to reach a consensus on this matter soon. He criticized the federal government for not having touched on the subject yet, and recalled that Minister Joaquim Levy had promised to bring proposals for the topic even before taking office, but he has not yet done so.

"So we have no other choice but to go ahead and fulfill our responsibilities," he said.

Walter Pinheiro (PT-BA) also lamented the lack of dialogue between the Executive and Congress regarding the matter. He still hopes that there can be a joint action between the powers to promote a wide-ranging reform in the federal pact, which covers the fiscal war, but sees no possibility of Congress not acting, even if alone.

- If the government does not present anything by Tuesday, then be patient. [Minister] Levy is still there and we are still here. I would not like this scenario. Contributions must not run parallel, they must converge. But that process had been defined since before - he resigned himself.


Senator José Serra (PSDB-SP) said he believes the urgency is dangerous, as it would speed up the process of the project without due discussion. He sees the proposal as incomplete, as it does not include other aspects of a broad reform of the federal pact, such as the unification of the interstate rates of the ICMS and the creation of a regional development fund.

"This project, as it stands, will greatly increase confusion in the country," he warned.

It was hit by Senator Lúcia Vânia (PSDB-GO), author of the original project, who recalled that the text had already been widely discussed by CAE and was even included in the Plenary's voting agenda in December. Senator Luiz Henrique also defended the bill's maturity.

- The federal government authored a package of tax and tax reforms that provided for all this. With this proposal we just reaffirm the government's intention - he argued.

Source: Agência Senado (15/03)

In charge of CAE, Delcídio wants to debate federative pact


Delcídio do Amaral (PT / MS) and Raimundo Lira (PMDB / PB, president and vice president of CAE (Photo: Disclosure)
Delcídio do Amaral (PT / MS) and Raimundo Lira (PMDB / PB), president and vice president of CAE (Photo: Disclosure)

Senator Delcídio do Amaral (PT) was elected this Tuesday, March 10, president of the Senate Economic Affairs Committee (CAE) for the 2015/2016 biennium. Upon taking office, he announced as one of the Commission's priorities in the coming months the discussion of “a great federative pact”, which will put an end to the fiscal war between the states. Senator Raimundo Lira (PMDB-PB) was sworn in as vice president. Delcídio said that the CAE is the appropriate forum for important reforms that the country requires, such as the tax and fiscal. Immediately, the new president informed that he is maintaining contacts with the Central Bank in order to schedule a public hearing with President Alexandre Tombini, who will make an assessment of monetary policy. At the next meeting, invitations to audiences with the ministers of Finance, Joaquim Levy, and of Planning, Nelson Barbosa, may be voted.

Source: Diário Digital (10/03)

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Supreme Court considers unconstitutional concession of tax benefits in PR

supreme imageUnanimously, the Federal Supreme Court (STF) declared the unconstitutionality of part of Paraná law that provided for the granting of tax benefits for imports made by the ports and airports of Paranaguá and Antonina, in Paraná. In the Court's view, part of the provisions challenged in Direct Unconstitutionality Action (ADI) 4481, filed by the National Confederation of Industry (CNI), are unconstitutional, since they constitute a benefit concession without the signing of an agreement.

According to the rapporteur of the action, Minister Luís Roberto Barroso, there are in Law 14.985 / 2006, of the State of Paraná, provisions that provide for the payment in installments without monetary correction or interest, and granting fictitious credits for Tax on the Circulation of Goods and Services (ICMS) ), which constitutes a situation of tax benefit. It was also considered unconstitutional a device that authorizes the governor to grant benefits for an illegal act. The minister explained that the STF's understanding is that “the unilateral concession of tax benefits related to the ICMS without the previous conclusion of an intergovernmental agreement, under the terms of Complementary Law 24/1975, affronts article 155, paragraph 2, item XII , letter 'g', of the Federal Constitution ”.

No request was accepted regarding article 1, item I, of the law, which establishes the suspension of the collection of ICMS charged for raw material and intermediate material until the moment of leaving the material already industrialized. "The STF has the position that the deferral, not meaning a reduction or dismissal, does not mean a tax benefit, and does not require an agreement," said Minister Barroso.

Source: Paraná Extra website (12/03)


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Levy says that granting incentives to companies creates legal uncertainty

The granting of tax incentives to the private sector creates legal risk, said Finance Minister Joaquim Levy on Monday, reinforcing that the fiscal adjustment put in place by the government is important to alleviate investors' fears.

"The idea of ​​offering tax incentives to companies at this time creates legal uncertainty," said the minister in a speech by the France Brazil Chamber of Commerce, in São Paulo.

Image: Wikicommons

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Fiscal adjustment requires commitment from States

Joaquim Levy, Minister of Finance, participates in the first CONFAZ meeting of the year
Joaquim Levy, Minister of Finance, participates in the first CONFAZ meeting of the year

The Minister of Finance, Joaquim Levy, was at the beginning of February at the National Council for Farm Policy (Confaz). In explaining to the state finance secretaries what the government's objectives are this year, that is, to spend less and collect more, the minister recommended that the states do their part to contribute to the fiscal adjustment.

Levy pointed out that the lack of rules for tax incentives granted by the states creates legal uncertainty, hindering the recovery of confidence and the resumption of growth. According to the minister, the government will support a consensus in relation to the validation of the incentives already granted, which is decisive to remove the legal uncertainty resulting from changes in tax incentive policies.

Some governors have already anticipated the minister's request. In Mato Grosso, a working group formed by representatives of the Secretariats for Economic Development (Sedec) and Finance (Sefaz) and the State Comptroller General was created to audit the tax incentives granted. The conclusions of the investigations are expected to be announced in April.

Mato Grosso also created another working group, formed by representatives of Sedec, Sefaz and the Secretariat of Planning (Seplan) to study a new policy model to attract investments. According to the secretary of Economic Development, Seneri Paludo, "the important thing is to create a new policy to attract investments and not just a policy of fiscal incentive".

Amid the discussion about rules for tax incentives and tax collection, the government of Espírito Santo estimated that it will stop collecting about R $ 1 billion this year because of the tax waiver of the companies being taxed. The new secretary of Finance, Ana Paula Vescovi, has reiterated the need for fiscal adjustment measures. Among the measures discussed are cutting public funds, reducing the transfer of funds to city halls and even increasing taxes.

The governor of Rio de Janeiro, Luiz Fernando Pezão, stated at the end of January that he “intends to suspend the tax benefits granted to the Petrochemical Complex of the State of Rio de Janeiro (Comperj), which benefit Petrobras. With these benefits, Petrobras collected R $ 2014 million less in ICMS in 400 than in 2013. “We cannot live without these resources. They are fundamental for the collection of the State ”, affirmed Pezão.

This is the time to deepen the national discussion on taxes and incentives, which have already served the purpose of attracting investments, and it is expected that Congress, on the return from recess, will advance in the negotiations for the reform of the ICMS. The proposal under evaluation provides for a gradual reduction in interstate ICMS rates, over a period of eight years. "The country needs this agreement," said recently the coordinator of Confaz and Secretary of Finance of Pará, José Tostes Neto. “The worst scenario would be to leave the binding summary of the Federal Supreme Court (STF) before the agreement.”


In Confaz, Finance Minister defends the end of the fiscal war

Joaquim Levy, Minister of Finance, participates in the first CONFAZ meeting of the year
Joaquim Levy, Minister of Finance, participates in the first CONFAZ meeting of the year

The first meeting of the National Council for Farm Policy (Confaz) had the surprise participation of the Minister of Finance, Joaquim Levy, who asked for the support of the States in this moment of fiscal adjustment to prevent the country from entering into an economic crisis. He also stressed to the finance secretaries across the country the need to end the fiscal war and establish rules for the validation of the tax benefits already granted.

Source: Electronic review (Ministry of Finance) - 05/02

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