Municipalities receive almost R$ 3 billion from the FPM this Tuesday (20)

The FPM is a fund that represents 22.5% of the collection of the Union, with the amounts received by the Federal Revenue Service, the Income Tax and the IPI. There are three transfers of resources per month, made every ten days (hence the name “ten days”). If the date falls on a Saturday, Sunday or a holiday, the transfer is brought forward to the first previous business day. City hall money is credited by Banco do Brasil.

According to the Public Budget and Finance consultant César Lima, the main reason for the drop in the amount of resources is the interest rate.

“We have a collection result that is 2.85% lower than the same period last year, which if added to the inflation of the period, we have a nearly 9% decrease between the second ten-day period of June 2022 and this next one, now Well, I think that a lot of that is linked to the maintenance of the selic rate at very high levels”, he analyzed.

Importance

The FPM is one of the main sources of revenue for municipalities. According to data from the CNM (National Confederation of Municipalities), the Fund is the largest source of funds for about 60% of city halls throughout Brazil. When tax collection falls, most municipal managers face great difficulties in keeping accounts up to date.

The FPM is a fund that represents 22.5% of the collection of the Union with the amounts received by the Federal Income Tax Office and the IPI. There are three transfers of resources per month, made every ten days (hence the name “ten days”). If the date falls on a Saturday, Sunday or a holiday, the transfer is brought forward to the first previous business day. City hall money is credited by Banco do Brasil.

How it works

The participation percentages of each municipality are calculated annually by the TCU, according to the number of inhabitants of each city and the per capita income of the states. Municipalities are divided into three categories: capital, interior and reserve. State capitals and Brasilia receive 10% of the FPM.

The other Brazilian municipalities are considered inland, and pocket 86.4% of the fund. Reserve municipalities are those with a population greater than 142,633 inhabitants and receive – in addition to participation as an interior municipality – an additional quota of 3.6%.