On December 5, 2019, Law No. 8,643/2019 was published, which amends provisions of Laws No. 4,056/2002 and 4,962/2002 related to the Fund for Combating Poverty and Social Inequalities ("FECP").
A few changes worth noting:
- FECP is now authorized to be in force until December 31, 2023, by means of the amendment of the main section of article 1 of Law No. 4,056/2002;
- Transactions with power consumption from 300 to 450 or above 450 kilowatt-hours per month (as provided for in sub-items "b" and "c," respectively, of item VI of article 14 of Law No. 2657/97) or the provision of communication services (provided for in item VIII of the same article) are subject to having 2% added to the ICMS rate, in addition to the regular 2% already levied by virtue of item I of article 2 of Law No. 4,056/2002. These changes will become effective after 90 days from the new law’s publication;
- Personnel expenditures on actions using FECP resources are limited to 50% of the Fund's estimated total revenue;
- The situations in which the State Executive Power is authorized to allocate the revenues of the Fund, provided for in art. 3 of Law No. 4,056/2002, were extended; and
- Article 7-A was added to Law No. 4,056/2002, stating that the minimum percentages of FECP allocations must be established annually in the Budget Guidelines Law ("LDO").
For more information about the topics raised in this Legal Update, please contact Ivan Tauil, Guido Vinci, Eduardo Maccari Telles, Carolina M. Bottino, Celso Grisi, Ana Luiza Martins or Thais Bandeira de Mello Rodrigues.