Brazil STF rules ICMS excludes electricity subsidy for low-income tariff

Brazil's Supreme Federal Court (STF) voted to exclude federal electricity subsidies for the low-income social tariff from the ICMS state tax base, in cases involving São Paulo, Bahia, and Rondônia. The ruling reduces state tax revenue and may lower electricity costs for distributors and consumers, but its fiscal impact on states is uncertain. This is a judicial decision with direct implications for state budgets and the power sector.