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Discover more about the significant disbursement that the government will make by November of this year. Click here and see it now!
The Minister of Institutional Relations, Alexandre Padilha, revealed last Monday (25) that the Brazilian government plans to, by the end of October or beginning of November, implement an installment payment of the funds allocated to remedy the losses faced by states and municipalities due to the reduction in ICMS (Tax on the Circulation of Goods and Services) rates.
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This plan is part of Complementary Bill (PLP) 136/23, which is currently under consideration in the Federal Senate.
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The Ministers of State, together with the government leaders in Parliament, shared this information with the media after a meeting with President Luiz Inácio Lula da Silva. Collectively, they discussed the weekly agenda of the National Congress and the priorities of the Executive's initiatives.
What prompted the ICMS compensation?
Changes in ICMS rates, a tax managed by the states, occurred due to the enactment of supplementary laws in 2022, which established new restrictions on fuels, natural gas, energy, telecommunications and public transportation – directly affecting the revenue of the federative entities.
PLP 136/23, developed to resolve this impasse, proposes the payment of R$ 27 billion by 2026 as a compensation method. This amount was agreed upon by the Ministry of Finance and the state governments, and was legitimized by the Federal Supreme Court (STF) in June.
What other actions is the government implementing?
Alongside the procedures already mentioned, it is worth highlighting the acceleration of the disbursement of R$ 10 billion, originally scheduled for 2024.
In this regard, it is also worth emphasizing that financial compensation is anticipated for municipalities that experienced a decrease in contributions from the Municipalities Participation Fund (FPM) between July and September, providing an additional R$ 2.3 billion for municipal governments.
Other sectors benefiting
The minister emphasized the need to revitalize the constitutional level of health investments. This had been frozen by the spending cap, and the revitalization took place through the new fiscal framework. Thus, the level of health investments requires the government to allocate up to R$ 21 billion to the sector this year alone.
Therefore, the measures mentioned are part of PLP 136/23, already ratified by the Chamber of Deputies. As mentioned previously, the aforementioned bill is under review in the Senate, where senators are working intensely to ensure its swift approval.
