Additional piece:
The recent ratification of the agreement between the Union and the states, providing for the transfer of R$ 26.9 billion to compensate for losses in ICMS collection, is a significant development that will help the country’s economy and address the financial difficulties faced by many state governments. The move comes after months of negotiations and debates between state representatives and the National Treasury, and the agreement will be paid over the next four years in installments.
This transfer is aimed at restoring the losses in the collection of the states, which were caused by the 2022 laws that reduced the ICMS rate on items considered essential, such as fuel. Since taxes are the primary source of revenue for state governments, this law caused significant financial strain on many states, which led to the current agreement being signed.
While some legal impasses delayed the agreement’s finalization, it is noteworthy that the terms of the agreement were drafted and negotiated by the federative entities themselves, without interference from the judiciary. The only involvement of the judiciary was in resolving legal issues and ensuring that the agreement terms were consistent with the country’s laws and regulations.
The agreement’s significance lies in the fact that it provides political and legal consensus that was achieved through a collaborative and consultative approach involving different stakeholders. This collaboration highlights the importance of joint efforts between different levels of government and stakeholders, including the business community, civil society, and other actors, in addressing the country’s economic challenges.
Moreover, this agreement signals a step towards stronger federalism in the country, as it recognizes the importance of empowering states and regions to manage their financial affairs effectively and efficiently. This recognition of the state’s role in the country’s economic development and governance is a crucial aspect for sustainable growth and development.
However, it is worth noting that the agreement’s success depends on its effective implementation and monitoring. The states must utilize the funds provided to address their fiscal challenges, improve their revenue collection and expenditure management, and enhance accountability and transparency in their financial affairs. The national government must also provide technical assistance to ensure that these resources are used efficiently and effectively, and the funds reach the intended beneficiaries, especially the vulnerable populations that have been most affected by the pandemic.
Overall, the recent ratification of the agreement between the Union and the states is a positive development that underscores the importance of collaborative and consultative approaches in solving the country’s economic challenges. While challenges remain, such as effective implementation and monitoring, this agreement represents a significant step towards stronger federalism, sustainable growth, and economic development.
Summary:
The Federal Supreme Court (STF) has ratified an agreement signed between the Union and states that transfers R$ 26.9 billion to compensate for losses in ICMS collection. The transfer aims to restore losses in the collection of states imposed by laws reducing the ICMS rate on essential items such as fuel. Each state will receive different repairs, paid over the next four years in installments. The agreement was signed in March after negotiations between state representatives and the National Treasury, with terms drafted and negotiated by federative entities without interference from the judiciary. The successful implementation of the agreement is critical to addressing the country’s fiscal challenges, improving revenue collection, expenditure management, and enhancing accountability and transparency in financial affairs. This agreement represents a significant step towards stronger federalism, sustainable growth, and economic development.
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The Federal Supreme Court (STF) ratified the agreement signed between the Union and the states that provides for the transfer of R$ 26.9 billion to compensate losses in ICMS collection. The decision was made unanimously in the virtual plenary that ended at midnight on Friday (2). Only the minister André Mendonça presented reservations, but he also accompanied the rapporteur minister, Gilmar Mendes.
The agreement was signed in March after months of negotiations between state representatives and the National Treasury. The repairs will be different according to the profile of each state and will be paid over the next four years, in installments.
The multimillion-dollar transfer aims to restore the losses in the collection of the states imposed by the 2022 laws that reduced the ICMS rate on items considered essential, such as fuel. Taxes are the main source of revenue for state governments. The law already provided for compensation, but the device was vetoed by then-President Jair Bolsonaro. After that, the states went to the STF to question the measure.
In his vote, Gilmar affirmed that the terms of the agreement “should be understood by the Legislative Power as a possible political-legal consensus, given the debates and solutions found.”
“It should be noted that the terms of the agreement were drafted, debated, negotiated and rewritten by the federative entities themselves, directly, without interference from the Judiciary. Just in the last week, before the deadline expired and in the face of some legal impasses, there was a more effective participation of this rapporteur and my office,” said Gilmar.
Related
Repasse de R$ 26,9 bilhões da União para os Estados é homologado pelo STF
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