Senator says he will argue with the STF and take “political measures” so that Congress’ decision is respected
The president of the National Congress, Rodrigo Pacheco (PSD-MG), criticized this Thursday (April 25, 2024) the government of President Luiz Inácio Lula da Silva (PT) for judicializing the exemption of municipalities and payroll. The senator stated that he will take “political measures”.
“The federal government makes the mistake of judicializing the policy and imposing its own reasons, in an apparent 3rd round of discussion on the issue of payroll tax relief”he said in a note. Read more below in full.
The statement came after Minister Cristiano Zanin, of the STF (Supreme Federal Court), responded to the Lula government’s request and granted an injunction that suspends sections of law 14,784 of 2023, which extended the payroll tax exemption for 17 sectors of the economy until 2027.
In the decision, Zanin says that there is no indication of the budgetary impact and indicates that there is a risk of a “significant imbalance in public accounts and an emptying of the constitutionalized fiscal regime”. Here is the full text (PDF – 294 kB).
In a note, Pacheco stated that he respected the minister’s monocratic decision and said that he would seek “point out the arguments of the National Congress to the STF through due legal process”.
The president of Congress also said that he will meet with the Senate’s consultancy and legal services on Friday morning (26 April) to discuss the issue. He also declared that he will call a meeting with the leaders of the Upper House.
“I will take care of political measures that ensure that Parliament’s option for maintaining jobs and the survival of small and medium-sized municipalities is respected”he concluded.
UNDERSTAND THE EXEMPTION IMPASSE
The Minister of Finance, Fernando Haddad, wanted to end the benefit now through MP (provisional measure) 1,202 of 2023. After the negative reaction from congressmen and entities, the government took the agenda to the Legislature in search of a partial victory – the which did not apply for relief.
The idea was to debate the issues in Congress through a bill so that there would be a middle ground between the economic team and congressmen on the subject. The proposal, however, did not advance and the government removed the urgency of the text sent for analysis by the Legislature.
The rapporteur of the project being processed in the Chamber, federal deputy Any Ortiz (Cidadania-RS), said that the new project on the topic would maintain the same format as the original – the exemption would remain until 2027 for the 17 sectors.
In January, the Treasury said that the impact on tax waivers of the payroll tax relief on the 17 sectors would cost R$ 12.3 billion to public coffers in 2024.
Read Pacheco’s full note below:
“The federal government makes the mistake of judicializing the policy and imposing its own reasons, in an apparent 3rd round of discussion on the issue of payroll tax relief. I respect the monocratic decision of Minister Cristiano Zanin and will seek to point out the arguments of the National Congress to the STF through due legal process. But I will also take care of political measures that ensure that Parliament’s option for maintaining jobs and the survival of small and medium-sized municipalities is respected. Tomorrow, first thing in the morning, I will meet with the Senate’s consultancy and legal team to discuss the issue. A meeting of Senate leaders will also be called extraordinarily.”
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