Haddad will make a proposal to states to contain fuel prices

The Minister of Finance, Fernando Haddad, said, this Wednesday (18), that the federal government will present a proposal to the states to change the incidence of the Tax on Circulation of Goods and Services (ICMS) on fuels. The measure is a attempt to contain pressure on pricesdriven by the conflict in the Middle East, and to avoid a possible truck drivers strike after the rise in diesel.

The strategy will be mediated during this Wednesday’s meeting of the National Council for Finance Policy (Confaz), a body formed by the Finance Secretaries of all states and the Federal District and chaired by the Finance Minister himself. Haddad did not anticipate the proposal, but stated that the policy of lower prices does not compromise fiscal health of the federative units.

For the minister, the increase in state revenue from ICMS following federal actions against tax evasion in the fuel sector, such as Operation Hidden Carbon. Furthermore, according to him, the new Contumaz Debtor Law, which combats repeated tax defaults, if adapted to state legislation, should also increase state revenue.

“This is a positive fact, that revenue increases without the tax increasing”, argued Haddad in an interview at the headquarters of the Ministry of Finance.

Although the federal government has already zeroed the PIS and Cofins on diesel last week, on a temporary basis, President Lula himself stated that the relief in the consumer’s pocket will be limited without state collaboration and asked “goodwill” from governors.

Still, states reject lowering the tax and they say that experience shows that Tax reductions on fuels are not usually passed on to the end consumer. In a note published on Tuesday (17), the National Committee of Secretaries of Finance, Finance, Revenue or Taxation of the States and the Federal District (Comsefaz), which brings together state Finance secretaries, stated that this type of measure generates a double loss to the populationbecause the price of fuel does not fall, but there is a loss of money for public policies.

Oversight

In addition to the diesel subsidy, last week, the federal government also determined, on a permanent basis, inspection measures e transparency to combat the abusive increase in fuel prices for speculation purposes. Abusiveness will be defined by objective criteria to be designed by the National Petroleum Agency (ANP).

Minister Fernando Haddad also recalled that the Federal Police opened investigation to investigate irregularities in the market e guarantee the transfer of federal tax reductions to fuel prices.

“You see that [o preço da] gasoline was not changed, in the case of Petrobras[whichraisedthepriceofdieselHoweverspeculatorsaretakingadvantageofthistenseclimateduetothewartotakeadvantageofthesituationdamagingthepopulareconomySothisisserious”hestated[queelevouopreçododieselNoentantoosespeculadoresestãoaproveitandoesseclimatensoemfunçãodaguerraparatirarproveitodasituaçãoprejudicandoaeconomiapopularEntãoissoégrave”afirmou

“In the case of diesel, we compensated, removing PIS and Cofins and subsidizing the difference so that there was no increase at the pump. And those who were speculating before the government’s measures, they haven’t lowered the price yet, at least not all of them”, added Haddad.

*With information from Agência Brasil