On June 23, the President of the Republic, Jair Bolsonaro, sanctioned Complementary Law 194, of 2022, which limits the collection of the Tax on the Circulation of Goods and Services (ICMS) on fuel prices. Recently, several states announced tax reductions, and the effects of the measure are already visible at fuel. Check out!
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After publication of the law, Brazilian states must now charge ICMS on fuels based on the minimum rate established by them, between 17% and 18%. The rate is a fixed amount or percentage used in the calculation of the tax, which comprises other costs, such as shipping and other expenses.
This is because, according to the law, as fuels must be considered essential and indispensable, it will no longer be the establishment of a rate higher than that considered for essential goods and services, which revolve around the 17 to 18%.
As a result of the application of the law, almost all Brazilian states have already announced the reduction of the ICMS tax rate on fuel. The first to implement the measure was the state of São Paulo, on June 27, 2022. The reduction was 7% in the value of the rate, jumping from 25% to 18%. According to estimates by the state government, the impact on public coffers will be approximately 4.4 billion reais.
In Rio de Janeiro, the announcement was made on July 1st. In the decree signed by Governor Cláudio Castro, the tax rate went from 32%, one of the highest in the country, to 18%, with a 14% reduction in the rate.
In the Federal District, after reducing the rate to 18%, according to the Fuel Retail Trade Union, there was an average reduction of 43 cents in the price of gasoline, while ethanol had a decrease of about 40 cents. The idea is that prices are reduced as fuel stocks are renewed.
