Ideli: changes render the Ports Provisional Measure useless.

Danilo Macedo
Reporter from Agência Brasil

Brasilia - The Minister of the Secretariat of Institutional Relations, Ideli Salvatti, said today (8) that if the changes made by Congress alter the central characteristics of the government's proposals for regulating the new rates of the Tax on Circulation of Goods and Services (ICMS) and the Provisional Measure on Ports (MP 595), they will end up losing their objectives and being useless. The texts are scheduled to be voted on later today in the plenary of the Senate and the Chamber, respectively.

"If the changes are so numerous that [the proposal] ends up losing its central characteristic, which is to streamline the processes of improvement and enhancement of the Brazilian port system, it will be fatally wounded, losing the very reason for the MP [595]. If we work on the issue of a unified tax rate to simplify and end the fiscal war [between the states] and the result doesn't go in that direction, but in the opposite direction, the change ends up being useless," Ideli said in the Senate.

Yesterday (7), party leaders in the Chamber reached an agreement to vote today on the Ports Provisional Measure. The proposal deals with the direct and indirect exploitation, by the Union, of ports and port facilities and on the activities carried out by port operators. However, there is no agreement either on the merits or on the voting procedures of the Provisional Measure, although the leaders have agreed that they will not obstruct the voting session.

According to the text approved by the Economic Affairs Committee (CAE), three ICMS (Value-Added Tax) rates were established to be applied to interstate transactions. The project's voting was concluded yesterday in the Economic Affairs Committee and it was sent to the plenary for consideration with a request for urgency. The states in the North, Northeast, and Central-West regions, and Espírito Santo, will adopt a single rate of 7% in trade and service transactions with other states. Those in the South and Southeast, except Espírito Santo, will apply a single rate of 4%.

Products from the Manaus Free Trade Zone and free trade areas will be distributed to other states at a rate of 12%. This percentage will also be applied to imported natural gas. In this case, regardless of the region through which the gas enters, it will be distributed to other states at a single rate of 12%.

Currently, the rates applied are 7% and 12%, depending on the state. The changes, after being approved in plenary session, will be implemented gradually, according to a schedule that begins in January of next year and runs until 2018. As this is a draft resolution, with the exclusive prerogative of the Senate, the matter will not need to be approved by the Chamber of Deputies nor sanctioned by the President of the Republic.

Regarding the Ports Provisional Measure, Ideli said that if it is not voted on today, it will become "unfeasible." However, she noted that the government has the prerogative to take a series of measures to increase the competitiveness of Brazilian ports. "Parliamentarians will have to answer whether they truly want the Brazilian port system to transform, in the sense of streamlining, reducing costs, and increasing competitiveness, or whether they want to keep practically everything as it is."

Edited by: Talita Cavalcante