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").