The federative model and the system of granting tax incentives in the tax on merchandise circulation

Abstract

This article examines the possible confrontation between the federal principle and the system for granting tax incentives to tax on merchandise circulation (ICM). To this end, initially discusses the essential characteristics of federative model, emphasizing the character of cooperation that records the Brazilian federalism. Examines the main aspects of the incentive grant scheme for ICM, opposing the systematic autonomy of such entities into a federation. Analyzes the relativity of constitutional principles, such as free competition, reducing regional inequalities and autonomy of federal entities, to the end conclude that, on behalf of the welfare of the community at the national level, is justified relativization of certain principles so that others can be achieved.