Kandir Law Change Regarding Export Offset
At the hearing, the states defended the end of the Kandir Law and that the government owes them $ 39 billion a year. The Federal Union has admitted that it can change the compensation system of the Kandir Law, but has argued that it owes nothing to the states on this issue because the amounts would have already been lowered by import taxes, and it is not these transfers that will resolve the issue: the serious financial situation of the states. The government also advocated measures to change the federative pact.
The deadline for the end of the commission coincides with the date scheduled for the Petrobras pre-salt auction, which is scheduled for the first half of December. The Chamber approved that 30% of the surplus onerous assignment amounts be allocated to the states and municipalities, which would amount to R$ 10.9 billion for each case the auction goes according to plan, according to the projection of the Treasury. With this transfer, the Federal Union will assess whether it amortizes the 2019 compensation of the Kandir Law due to the states, but does not commit for not being sure of the amount that will be collected. So far, states have not received compensation for this year.
The Kandir Law has been in force since 1996 and exempts ICMS from exports of products and services, with due compensation by the Federal Government to states and municipalities. However, Congress should regulate a formula for this compensation - which has never been done.
In February, Gilmar Mendes gave another year as the deadline for Congress to regulate it, but so far no progress has been made. The hearing was called at the request of the States, in a context of serious crisis, to find a solution until the Legislature is not pronounced.
At the hearing, the Federal Union's speech address to the states was that their financial situation is not the best either and that it has gone through various contingencies. He also argued that, according to an opinion of the Federal Court of Audit (Tribunal de Contas da União - TCU), there are no government debts with the states, because the taxes collected on imports offset the immunity of exports.
The states, however, said they never had access to the TCU opinion. The AGU has pledged to make this opinion public.
Representing the 27 federative units, spoke the governor Helder Barbalho, from Pará, and the prosecutors of Minas Gerais Onofre Alves Batista Junior and Sergio Pessoa. The Pará governor said that the Kandir Law sacrifices the states that export most primary products, such as ores.
Minister Gilmar Mendes, who mediated the discussion, stated the importance of the working group and said that the Supreme is the scene of many federative conflicts (Source: JOTA).