Cláudio Castro asks Haddad to review Rio’s fiscal recovery

The exemption from the Tax on the Circulation of Items and Companies (ICMS) on a number of merchandise precipitated a lack of income of R$ 5 billion for the state of Rio de Janeiro, mentioned this Tuesday (7) the governor of Rio de Janeiro, Cláudio Castro . He met for about two hours with the Minister of Finance, Fernando Haddad, to ask for a evaluate of the state’s Fiscal Restoration Regime (RRF).

Based on Castro, Haddad promised to evaluate the basis of agreement signed in June final yr, however mentioned he’ll solely begin discussing the matter after resolving the negotiations for the provisional measure that will increase the price of gasoline and ethanol. The governor identified that the state shouldn’t be contemplating leaving the RRF, however defended the revision of the settlement to keep away from imbalance in native accounts and issues within the public service.

Final yr, complementary legal guidelines 194 and 192 established a most fee of 18% for ICMS on gasoline, telecommunications, vitality and public transport. Earlier than the legislation, the state charged as much as 32% of ICMS. Based on Castro, the drop in state income, attributable to the exemption, made it not possible for the federal government of Rio to honor the installments of the debt with the Union foreseen for this yr.

“Rio’s (Tax Restoration) Regime was signed every week earlier than Legal guidelines 194 and 192 have been enacted. At the moment, our tax assortment actuality was one, which is why the plan was authorised. As quickly as 194 and 192 come into power, they modify our assortment base, which modifications the entire perspective of the fee plan”, mentioned Castro after leaving the assembly with Haddad.

Simply with the ICMS on gasoline, says Castro, the lack of assortment reached R$ 3 billion final yr. For this yr, he estimates an excellent better affect, of R$ 10 billion, contemplating all exempt objects, not simply gasoline.

Compensation

The very legal guidelines that relieve ICMS, a tax administered by the states and the one which collects probably the most within the nation, present for the loss compensation assortment, which is being negotiated with the federal authorities because the starting of the yr. Based on Castro, Haddad promised to resolve the compensation inside ten days and, solely afterwards, talk about a doable revision of the Rio de Janeiro RRF.

The federal authorities desires to unfold the compensation over the 4 years of its mandate, however there may be disagreement relating to the values. The states and municipalities are asking for R$45 billion. The Nationwide Treasury promised half: R$ 22.5 billion. On the final twenty eighth, Haddad met with the minister of the Federal Supreme Courtroom (STF) Alexandre de Moraes, rapporteur of the state debt settlement within the courtroom, to debate the topic.

Concerning the gathering of ICMS on gasoline and ethanol, Castro mentioned he recommended to the Governors’ Discussion board a fee of twenty-two% or 23%, legitimate for the complete nation. “(This fee) would exchange losses and wouldn’t attain the absurd worth that was earlier than”, declared the governor.