SP Government backs down on increased ICMS

The Government of Sao Paulo came back behind the proposed raise from 18% to 23% the rate of tax on circulation of goods and services (ICMS) on beer.
On the strength of this increase between parliamentarians of the Legislative Assembly of the State of São Paulo (Alesp), which will vote on the measure, and after obtaining the commitment of industries producing the beer industry jobs will be retained, as well as the installed capacity and the volume of investments in the State, the Governor Geraldo Alckmin (PSDB) agreed to reduce the set of seven percentage points to four points a total of 22%.
On the rate of 23% would cover the additional charge of 2% to fuel the anti-poverty Fund, which would give 25% in practice. The decision released in trade.
Alckmin sent on day 28 of October to the Legislative Council Bill that amounted to 18% to 23% the GST of beer and 25% to 30% of the cigarette. Out elevation, included the additional charge of 2%, to a background of Poverty, also being created by State representatives, expected to raise $ 1 billion a year for projects in areas subject to vulnerability.
The Governor has also proposed a reduction of 18% to 12% in the rate of generic drugs and sand, widely used in construction, from 12% to 8%. In addition to the Bills with changes to the GST, Alckmin sent on the same day Parliament paulista reseting the ICMS tax Decree of rice and beans, which make up the basket. The rates of these products were of 7%.
In the statement on amending the proposal to increase the GST on beer, the São Paulo State Government says that "the industry still will seek to absorb the increased tribute with productivity and efficiency gains, given the good conditions of the State's competitiveness, in particular of a lower state tax on inputs such as fuel and electricity. And highlights: "the commitments made by the industry and the increase in their activities due to allow design a production enough to reduce, from seven to four percentage points, the original proposal of the industry rate."
The new rates of GST depends on approval by the Legislative Assembly./associated press Content