President Jair Bolsonaro sanctioned this Wednesday (27) a Complementary Law Project (PLP) that extends for 15 years tax benefits granted by states to sectors of commerce. The project has already been analyzed by the National Congress and will now take effect. 
The text provides for the extension of benefits in the Tax on the Circulation of Goods and Services (ICMS) for the wholesale trade sectors and companies that develop port and airport activities. In addition, traders and interstate transporters of agricultural products and in natura plant extracts can benefit.
The purpose of these tax benefits is, in practice, to attract companies and encourage investment. The new law provides for a gradual reduction of benefits extended over the last four years of the 15 planned. Only the sector of sales of agricultural products and in natura vegetable extracts are not included in this reduction.
The law supports the benefits granted by the states and the Federal District through internal rules, but without endorsement by the National Council for Finance Policy (Confaz), an episode that became known as the ICMS “tax war”.
“The measure, by allowing the states and the Federal District to extend the term for the enjoyment of ICMS tax incentives, not only has the potential to benefit sectors related to the distribution of goods and agricultural products and extractives of vegetables, important for the economy as a whole, but also allows for the expansion of consumption by reducing the price of essential items to the final recipient by diluting the tax burden,” informed the General Secretariat of the Presidency in a statement announcing the sanction.
