Pimentel asks that Brasília "give back to Minas what belongs to Minas"

Minas Agency - Governor Fernando Pimentel participated this Monday (October 16th) in a meeting at the Belo Horizonte City Hall that discussed the impacts of fiscal losses caused by the Kandir Law on the capital's finances, which amount to approximately R$ 4 billion. The study was produced by a special commission of councilors from Belo Horizonte and also recalled the effects of the Kandir Law on the finances of Minas Gerais. According to state estimates, the Union has to transfer approximately R$ 135 billion to the state, an amount related to losses from the Kandir Law over the last 20 years. Created in 1996 by the federal government, the law removed the ICMS tax levied on exported products, penalizing the states.

Governor Fernando Pimentel reminded everyone that the amount is rightfully owed to the people of Minas Gerais, a decision already recognized by the courts. "We want nothing more and nothing less than what is fair: the reimbursement of losses that has already been calculated by Confaz (National Council of Finance Policy). In the case of Minas Gerais, this amounts to approximately R$ 135 billion in accumulated and unreimbursed losses over the roughly 20 years that the Kandir Law was in effect."

The governor highlighted that the impacts of the law are "disastrous" for the state, since almost half of Minas Gerais' GDP is tied to coffee and mining, two of the main items on the export agenda. "In a state like Minas Gerais, where practically half of the economy is export-oriented, with mining and coffee, the Kandir Law was a disaster for public finances. We want an accounting reconciliation, deducting this amount from the debts we have with the Union. This way, the state and municipalities can balance their finances and do what they need to do, which is to provide good quality public services. We will demand that Brasília do what is right: return to Minas Gerais what was taken from us," he stated.

The mayor of Belo Horizonte, Alexandre Kalil, advocated for a clear and transparent timetable for the federal government to comply with the Supreme Federal Court's (STF) ruling on reimbursement to states and municipalities. The National Congress must create a law regulating the reimbursement. "We want the Kandir Law to be settled, in a plan that involves investing more money in health and education. We need a non-partisan front so that Minas Gerais stops resisting and starts receiving [the funds]," he pointed out.

Councilman Gil Reis, president of the commission that discussed the matter in the Belo Horizonte City Council, assessed that it is necessary to re-discuss the Kandir Law. "Of the total amount that was not collected, 25% belongs to the municipalities. Belo Horizonte will receive around R$ 4 billion, which represents an amount that can solve structural problems in health and education. These amounts should not be included in any analysis other than a simple accounting," he said.

State Representative Rogério Correia, representing the Legislative Assembly of Minas Gerais at the ceremony, suggested, for example, that the State be relieved of the obligation to make the monthly transfers of R$ 400 million related to debts with the Federal Government and demanded that the Federal Government take immediate compensatory measures. "This would represent R$ 5 billion per year for Minas Gerais, which is the size of our deficit, despite the spending cuts that the state government has already made. No longer having to pay this monthly debt would be a victory," stated the legislator, noting that there is a commission in the ALMG (Legislative Assembly of Minas Gerais) that discusses the matter.

The president of the Belo Horizonte City Council, Henrique Braga, said that he unconditionally supports the mobilization of politicians and their demand for accountability. "The law imposes exorbitant losses, and the rules for compensation are not clear."

Also participating in the meeting were the State Secretaries of Government, Odair Cunha, and of Finance, José Afonso Bicalho, the Deputy Attorney General of the State, Sérgio Pessoa de Paula Castro, as well as state deputies Durval Ângelo and André Quintão, city councilors, and representatives of civil society.