The increase in the crisis related to the ICMS was used to pay for the withdrawal of the server – 07/01/2019 – Market



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Twenty states and the federal district have increased over the last two years different rates of ICMS (tax on the movement of goods and services) to offset collection losses.

However, most of the money was not meant for costs or investments, but for the payment of retirements of employees who left the company behind. on an unprecedented scale, generating billions of dollars in public accounts.

In recent years, the social security deficit in the states has almost doubled and is rapidly approaching R100 billion.

Between 2014 and 2017, the average annual growth of inactive people in the United States was about 6%. There is an acceleration of this trend and almost half of the people who are still working are likely to retire in the next ten years.

In the 12-month period between September 2017 and August 2018, inactive spending jumped 8%. In comparison, according to the Institute for Applied Economic Research (Ipea), the increase in the number of active employees was 0.9% over the period.

The ICMS states grew by almost 5% last year, well above

In addition to the revenue increase related to the mild economic recovery, states like São Paulo, Rio de Janeiro, Rio Grande do Sul and Pernambuco, among others, have upgraded the ICMS system.

Additional revenue did not offset the rise in inactive spending, which already exceeded revenues in several states before the recession

Projections for 2018 indicate that on average, nearly a quarter of the income net current of states is already spent on pensions.

In Rio Grande do Sul, over 40% of income goes to the inactive; in Minas Gerais and Rio Grande do Norte more than 30% – an amount already spent by most North-East States

. This is why most of the elected governors have asked the new Minister of Economy, Paulo Guedes, to support a pension reform that increases the minimum age of retirement agents and the contribution of the inactive

In exchange for support for the reform, according to Folha the governors might have more resources in the teller.

Today, it is the Union that collects, for example, the IPI (Industrialized Products Tax) and the IR (Income Tax) generated in the states, then restores them 21.5% of the value through the State Participation Fund. . One of the ideas would be to decentralize some of these resources by supporting reforms.

For Fabio Giambiagi, Chief Economist of the BNDES, the chaos experienced until recently by Rio, with arrears of pensions and salaries, as well as the shortfall.

He proposes to functionalism the minimum age of 65 for men and 63 for women, replacing the current rule of 60 and 55 respectively. , in practice, with the pensions for contribution time of the agents.

For public finance expert Cláudio Hamilton dos Santos, the recession has worsened the situation of states that have lost revenues.

He argues, however, that the real tragedy is that states can not support the increase in spending caused by the wave of retirements caused by aging public servants.

More than half (51%) of the waiters are now entitled to special pensions, which allows them to take early retirement because of activities considered exhaustive or risky – 96% of Military police, for example, retire before the age of 50, according to Ipea. 19659002] In addition to pension reform, one of the solutions being investigated by the states is the creation of funds with their own badets (such as real estate and corporations) that would be capitalized to back up the securities sold on the market, in the public accounts, Raul Velloso collaborated with Rio to develop a fund like this, which would include oil royalties, public debt and real estate. For Velloso, another serious problem is that many of the governors who left office left outstanding accounts, which is prohibited by the Financial Accountability Act at the end of the term.

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