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Find out more about the significant disbursement that the government will make until November of this year. Click here and see now!
The Minister of Institutional Relations, Alexandre Padilha, revealed on Monday (25) that the Brazilian government has plans to, by the end of October or beginning of November, implement an installment plan for the funds allocated to remedy the losses faced by states and municipalities due to the reduction in ICMS (Tax on Circulation of Goods and Services) rates.
This plan is part of Complementary Bill (PLP) 136/23, which is currently being evaluated by the Federal Senate.
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The Ministers of State, together with government leaders in Parliament, shared this information with the media after a meeting with President Luiz Inácio Lula da Silva. Together, they discussed the weekly agenda of the National Congress and the priorities of the Executive branch’s initiatives.
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What motivated the ICMS compensation?
Changes in the ICMS rates, a tax managed by the states, occurred due to the introduction of complementary laws in 2022, which established new restrictions on fuels, natural gas, energy, telecommunications and public transport – directly affecting the revenue of the federative entities.
PLP 136/23, developed to resolve this impasse, suggests the settlement of R$1.4T 27 billion by 2026 as a method of compensation. This amount was agreed upon by the Ministry of Finance and state governments, and was legitimized by the Supreme Federal Court (STF) in June.
What other actions is the government implementing?
Along with the procedures already mentioned, it is worth highlighting the acceleration of the disbursement of R$10 billion, originally scheduled for 2024.
In this sense, it is also worth highlighting that a financial reward is expected for municipalities that experienced a decrease in contributions from the Municipal Participation Fund (FPM) between July and September, providing an additional R$2.3 billion for municipal governments.
Other sectors benefited
The minister emphasized the need to revitalize the constitutional level of investment in health. This had been stagnant due to the spending cap, and the revitalization was carried out through the new fiscal regime. Thus, the level of investment in health requires the government to allocate up to R$1.4T 21 billion to the sector this year.
Therefore, the measures mentioned are part of PLP 136/23, already ratified by the Chamber of Deputies. As previously mentioned, the aforementioned bill is under review in the Senate, where senators are working hard to ensure its rapid approval.
