off-the-wire

Brazil's government to compensate states $5.2 billion for cut in state tax ICMS

Kitco Media
By Reuters
Published:
Updated:
Reuters
BRASILIA, March 10 (Reuters) - Brazil's Finance Minister, Fernando Haddad, announced on Friday that the federal government will provide compensation of 26.9 billion reais ($5.2 billion) to states for their losses due to the reduction of the state tax ICMS.


The Congress approved a ceiling on ICMS tax rates for fuels, electricity, telecommunications, and public transportation services last year with the support of then-President Jair Bolsonaro's government, as part of efforts to reduce inflation.


The law already provided for federal government compensation, but there was no consensus on the amount to be transferred. The Federal Supreme Court was mediating the negotiation. ($1 = 5.1924 reais) (Reporting by Marcela Ayres)

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