ES government freezes ICMS on fuels, criticized by Bolsonaro for rising prices

The government of Espírito Santo decided, this Monday (27), to freeze the ICMS (tax on the circulation of goods and services) on fuels to contain further increases in the price paid by consumers at gas stations in the state.

This is the first measure taken by a state on ICMS since President Jair Bolsonaro (non-party) dumped responsibility for recent increases in product prices in the lap of state managers.

The ICMS, a state flag tax, has been used by Bolsonaro (no party) as one of the main reasons for gasoline to have reached the price of R$7 per liter in some regions of the country this year.

In his live last week, Bolsonaro once again said that gasoline costs R$ 2 from the refineries and the states are to blame for the price being much higher than that.

In a letter, made public last week, 20 governors questioned the president’s statement and said that, in the last 12 months, the price of gasoline has increased by more than 40%, “although no state has increased the ICMS on fuels. ”.

For state managers, the problem involving the topic is national, “and not just a federal unit”. And they sent a clear message to the agent, saying that “telling the truth is the first step in solving a problem.”

Espirito Santo measure
In practice, what the government of Renato Casagrande (PSB) did was to freeze the update of the Weighted Average Price to Final Consumers (PMPF) for the coming months, in case new increases in the value of oil products in the country are registered.

The PMPF produces the calculation basis for charging on operations related to the ICMS that is levied on fuels and is reviewed every 15 days based on surveys carried out by the ANP (National Petroleum, Natural Gas and Biofuels Agency) on the prices charged by the posts.

An example: the rate on diesel sold in Espírito Santo is 12%. The price of the product varies between R$4.41 and R$4.85 at service stations, according to the ANP. Thus, the calculated PMPF is BRL 4.50. Therefore, the tax to be paid is 12% on this amount, which corresponds to R$0.54.

In a statement, the Espírito Santo government also said that if fuel prices rise in the coming weeks, the state will not collect anything more from it. And if the price drops, the average price table will be readjusted to follow the decreasing trend. “This measure tends to be much more effective than reducing the tax rate,” said Marcelo Altoé, Espírito Santo’s finance secretary.

The average price has not been updated since July for LPG sold in Espírito Santo. Currently, cooking gas has been traded for between R$86 and R$110, but the state charges the tax on R$71.69.

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