Through an interim measure, the President Michel Temer released, on Thursday (13), R $ 1.95 billion to replace losses with tax credits on Sales and Services (ICMS) in the states, municipalities and the Federal District.The MP 749 was published in special edition of the Official Gazette of the Union.

The financial aid for the year 2016 will be paid in a lump sum by the last business day of December. The distribution of resources between the states will be made according to criteria defined by the National Council for Financial Policy (Confaz), a body that brings together the secretaries of Finance of the 26 states and the Federal District.

With defined year on year values, the aid is provided each year from Kandir Law. In place since the late 1990s, the law exempted ICMS exports of unprocessed products, on the grounds that no country can export taxes.

As the VAT is administered by the states and has 25% of revenues shared with municipalities, the federal government commits to replace losses every year. The main states impacted by Law Kandir are the major exporters of agricultural products. Among them are Mato Grosso, Goiás and Paraná.

In September, the governors had requested federal assistance for payment of the amounts of the Export Support Fund (FEX), paid as compensation for the losses with the exemption of exported products.

Source: Portal Brazil, with information from the Agency Brazil