Government of RS postpones decree cutting tax benefits; understand | Rio Grande do Sul

In addition to cutting incentives, the decree provided for an increase to 12% in the taxation of basic basket products. Currently, items are exempt or have rates of up to 7% of the tax.

In note (read the full below), the government stated that, during this period, will analyze the proposal of 26 business entitieswho suggested the increase in ICMS from 17% to 19% as an alternative to cutting incentives.

“The state government has always been in permanent dialogue with Rio Grande do Sul society about the need to restore state revenues”, says the statement.

Governor Eduardo Leite (PSDB) did not comment on the measure this Thursday. On Wednesday (27), after a meeting with businesspeople, the politician stated that the discussion of “plan A” could be resumedwhich is the increase in ICMS instead of cutting benefits and increasing the rates on basic basket items.

Gaucho governor admits reviewing decrees that reduce tax benefits in RS

The Executive justified that, without the increase in ICMS, RS would lose R$4 billion annually with the tax reform.

As an alternative, Eduardo Leite signed, in December 2023, the decree cutting tax benefits in 64 sectors. This measure, which ended up being postponed this Thursday, would come into force on April 1st.

Now, what comes back to the discussion is the increase in ICMS. However, instead of the 19.5% rate, the 19% proposal, presented by businesspeople, is analyzed. If approved, the new rate would only be valid in 2025.

“The State government has always been in permanent dialogue with Rio Grande do Sul society about the need to restore state revenues.

Committed to this spirit and sensitive to the consensus formed between 26 business entities, associations and unions in Rio Grande do Sul, governor Eduardo Leite decided to postpone for 30 days the beginning of the decrees that review tax benefits, scheduled to come into effect on the day April 1st.

During this period, the State government will take steps in the direction proposed by the document received, aiming to build an alternative for restoring state revenues.”