Pacheco says the decision to dehydrate Haddad’s proposal ‘doesn’t affect’ his relationship with the government – News

The president of Congress and the Senate, Rodrigo Pacheco (PSD-MG), stated this Tuesday (2) that the dehydration of the provisional measure (MP) that dealt with the reimbursement of the municipalities’ payroll does not “shake” the relationship between Congress with the Executive. On Monday (1st), Pacheco overturned the government’s decision to reinstate the social security contributions of city halls, contrary to what the Minister of Finance, Fernando Haddad, defends. “I would like to make an important clarification of our good alignment with the federal government, especially with the Ministry of Finance and Minister Fernando Haddad. This does not affect the relationship we established and which was very fruitful in 2023”, he said. “There is no type of affront [ao governo federal]nor fiscal irresponsibility”, he commented.

In August last year, Congress approved the extension of the payroll tax exemption for 17 sectors and for municipalities with up to 156 thousand inhabitants. President Lula vetoed this measure, but Congress overturned the veto, guaranteeing the continuity of the exemption.

As a result, the government issued a provisional measure to reburden the payroll, but came under pressure from the Legislature and entities representing city halls and exempted sectors.

Pacheco classified the government’s decision to discuss the matter through a provisional measure as “unreasonable” and reaffirmed that the payroll tax exemption for municipalities and 17 sectors of the economy was a decision of the National Congress that must be respected. “If there is any error [na desoneração da folha de pagamento]which should be discussed through a bill that seeks to change the model established by law”, he added.

Pacheco clarified that, if the measure were maintained, municipalities would go through a period of three months with a tax rate of 8%. After this period, the provisional measure would be in force for 60 days with a rate of 20%. At the end of this period, the rate would return to 8%. “We are going to have three, four different tax models because of the instability generated by a provisional measure.”

“The rationale behind the decision is to seek to establish legal certainty and predictability for municipalities. I’m not even going to go into the merits of the difficulty faced by Brazilian municipalities in closing their accounts.” Pacheco said he has no scheduled meeting with Haddad to discuss the matter. “The decision has been made,” he concluded.