Minister Dias Toffoli, of the Federal Supreme Court (STF), decided to suspend this Monday (6) the fine imposed by the Union on Rio de Janeiro for failure to pay installments of the debt arising from the Tax Recovery Regime (RRF), signed in 2021.
In the decision, the minister suspended an increase of 30 percentage points in the debt and authorized the Rio government to pay the outstanding installments for the year 2023 without applying penalties.
Despite the decision in favor of the Rio government, Toffoli denied the request to suspend debt payment. The state’s budget deficit for 2024 is forecast at R$8.5 billion.
“I consider it hasty to ensure, through a preliminary decision, the right to suspend payments until the Federal Union and the tax authorities carry out the renegotiation of the public debt, under penalty of implementing a scenario of greater legal uncertainty, worsening the condition of recognized insolvency”, added the minister.
Recovery
The Fiscal Recovery Regime, created by Complementary Law 159 of 2017, allows states in a situation of fiscal imbalance to have benefits, such as the relaxation of fiscal rules, the granting of credit operations and the possibility of suspending debt payment.
On the other hand, the federation units must adopt institutional reforms that allow the restructuring of fiscal balance, such as the approval of a spending ceiling, the creation of supplementary pensions and the equalization of the rules of the Private Social Security Regime (RPPS), in which applicable, to the rules of Union servers.
The state of Rio de Janeiro requested entry into the regime in 2017.
A new RRF was created by the Union in January 2021. Rio de Janeiro, unable to balance its accounts in the previous RRF, applied to join the new regime in May of that year, but its plan would only be approved in June of last year .
With the new plan, the recovery regime will last until 2031. Rio de Janeiro will have 30 years to pay off its debts with the Union.
