Coari ICMS tax share increase sparks legal dispute in Amazonas

A judicial decision has significantly altered the distribution of the Goods and Services Tax (ICMS) in the state of Amazonas, increasing the share for the municipality of Coari from approximately 2.55% to 5.81%. This change places Coari as the second-largest recipient of the tax among the state's 62 municipalities, trailing only Manaus.

Following the ruling by Judge Marco Antônio Pinto da Costa, the Amazonas State Finance Secretariat (Sefaz-AM) is required to implement the new rate and pay Coari approximately R$ 91.6 million in retroactive amounts. The municipality argued that its participation coefficient had not been updated since 2007 and should account for local oil and gas production.

In response, the Mayor of Manaus, Renato Junior, has filed a legal appeal to contest the decision. He argued that the increase for Coari results in a direct reduction of funds for Manaus and the other 60 municipalities in the state. Junior criticized the state government for a lack of dialogue with affected cities, stating, “It is not fair that one municipality wins and all the others lose.”