On November 7, 2023, Law No. 17,843/2023 was promulgated, establishing the “Paulista Agreement” program. Developed by the Attorney General’s Office of the State of São Paulo (PGE/SP), this innovative program aims to enhance tax transactions in the state, offering significant benefits to taxpayers with debts in active debt. Below, we highlight the main points of this program:
Program Objective: The “Paulista Agreement” was conceived with the aim of strengthening the technique of “consensuality,” promoting the reduction of excessive litigation in the state. The program focuses on facilitating the payment of debts in active state debt, offering advantageous conditions to taxpayers.
Benefits Offered:
Installment of debts in active debt in up to 145 installments.
Use of tax credit certificates and accumulated ICMS credits.
A favorable legal environment for taxpayers’ tax compliance.
Data on Active Debt in São Paulo: In the State of São Paulo, there is an impressive amount of R$ 394 billion in active state debt. Of these, approximately R$ 157 billion are considered collectible. There are more than 7 million debts related to ICMS, ITCMD, IPVA, and other taxes that were not paid on the due date by taxpayers. PGE/SP is responsible for collecting these debts through administrative and judicial processes.
Revenue Estimate: With the approval of the program, the Attorney General’s Office of the State of São Paulo estimates significant revenue. Only related to tax transactions, the projected revenue for the next year is R$ 700 million. In 2025, this amount could reach R$ 1.5 billion, and in the following year, R$ 2.2 billion.
Discounts and Installment: The program provides discounts on fines, interest, and other legal surcharges for debts classified as unrecoverable or difficult to recover, with limits of up to 65% of the total transacted value. For individuals, microenterprises, and small businesses, discounts can reach up to 70% of the total transacted value, with the possibility of installment in up to 145 installments. For other cases, debt payment can be made in up to 120 installments, using tax credit certificates and accumulated ICMS credits. Additionally, the program allows for the transaction of small-value debts and debts related to cases of significant and widespread legal controversy.
Modernization of Collection: The “Paulista Agreement” also includes measures to modernize the collection of active debt, including selective filing of tax execution, administrative redirection of collection, premonitory registration of the active debt certificate, regulation of procedural legal transactions, and the creation of a positive fiscal registry.
Effectiveness: According to Article 42 of Law No. 17,843/2023, it will come into effect 90 days after its publication.
The creation of the program represents a significant advancement in how the State of São Paulo handles the transaction of tax debts. In addition to benefiting taxpayers, the “Paulista Agreement” has the potential to strengthen revenue and tax compliance, contributing to the financial stability of the state and reducing litigation.