President Jair Bolsonaro sanctioned with vetoes the bill passed by the National Congress that provides for a ceiling limiting the Tax on the Circulation of Goods and Services (ICMS) that is levied on fuel, electricity, communications and public transport, items that, according to the text, , are considered essential “for taxation purposes”.
The presidential order presenting the justifications for the veto was published in extra edition of the Official Gazette of the Union on Thursday night (24).
By defining these items as essential, the new law does not allow federative units to charge fees with a percentage above the aforementioned tax rate, which varies between 17% and 18% – a percentage lower than that charged for other items, considered “superfluous”.
Among the vetoes made by the president is the article that guaranteed, to the entities of the federation, compensation in case of loss of resources, caused by the Complementary Law itself. The text guaranteed financial availability so that “the constitutional minimums in health and education” – which would include the resources of the Basic Education Maintenance Fund (Fundeb) – were maintained.
In the reasons given by President Bolsonaro for the veto is that the proposal goes against the public interest “by allowing the creation of public expenditure of a continuous nature, different from the temporary measures approved in the other articles of the same proposal, as well as by establishing that the Union would compensate the federation entities, without a defined deadline, so that the constitutional minimums of health and education and Fundeb would have the same financial availability in comparison with the situation in force before the Complementary Law”.
Also according to the justification presented, the proposal “would create compensation for the Union and expenses for states and municipalities that could increase possible financial imbalances”.
An excerpt from an article was also vetoed, providing that states and municipalities would transfer the “tranches related to the ICMS share” in the “proportion of the deduction of debt contracts guaranteed by the Federal Government”, as well as in the proportion of the appropriate portion of the Financial Compensation for the Exploration of Mineral Resources (CFEM).
Among the justifications for the presidential veto is that the legislative proposal “would create compensation for the Union of greater complexity and financial cost without real effectiveness, given that, despite the pandemic environment, in the last two years a significant improvement has been observed. in the fiscal situation of states and municipalities, especially as a result of the growth in ICMS collection”.
