Government dismisses different rates for interstate ICMS

The levying of ICMS on interstate transactions promises to be one of the controversial tax reform, which is on the agenda of the federal government.

The differences are many. For example, the proposal to establish different rates for the tax according to the degree of state development, formulated by the governors of the Northeast, was ruled out by the Ministry of Finance.

Nelson Barbosa, Executive Secretary of the folder, this is not the ideal way to end the war tax.

"We repeat what we said to the governors of South and Southeast last week. The federal government considers a more unified lowest rate (for interstate ICMS) ", he said.

The collection rates of 7% and 2% according to the state per capita income was suggested by the governor of Ceará, Cid Gomes, and gained the support of other governors in the region, who met on Tuesday, 24, with the Minister Guido Mantega.

Barbosa admitted, however, that the economic team is open to discuss the collection of federal tax rates differentiated according to the degree of state development, to encourage the development of regions with lower per capita income.

"This is a model used in many developed countries," Barbosa said, noting that the difference here is that tax incentives are coordinated by the federal government not to involve state taxes like the GST.

One of the concerns of governors of the Northeast is in e-commerce, whose collection of ICMS is retained in the State of origin of the goods are installed in distribution centers of business.

Nineteen states and the Federal GST 21 signed the Protocol, the National Policy (Confaz), which provides the assignation of the tax.

The proposal is similar to what happens with cars, most of the tax (55%) goes to the producing States and the rest (45%) with the consumer states.

According to Barbosa, the federal government supports the agreement but so far, states have to reach a consensus to define the shape of the distribution of GST.

Source: Com Brasil Agency