The Senate will appeal the decision of the Minister of the Federal Supreme Court (STF) Cristiano Zanin who suspended the payroll tax exemption for 17 sectors of the economy and the reduction in Social Security contributions for small municipalities. According to the president of the House, Rodrigo Pacheco (PSD-MG), there are sources of resources to offset the impact of the measures.
The measure was announced after Pacheco’s meeting with the Senate’s Legal Consultancy. Pacheco classified the decision of the Attorney General’s Office (AGU) to appeal to the STF as “catastrophic”.
“[O recurso da AGU] It surprised everyone, especially given the moment we are living in of discussion and search for alignment between the federal government and the National Congress”, declared Pacheco.
According to the president of the Senate, several measures approved by Congress last year to increase revenue provided resources to pay for exemptions for 17 economic activities and small municipalities. Last year, Parliament approved the taxation of offshores (investment companies abroad), the limitation of financial aid from states to large companies and the return of the government’s tie-breaking vote in the Administrative Council of Tax Appeals (Carf).
“What caused perplexity and a lot of dissatisfaction to the National Congress was the behavior of the federal government. Why rush into an action of this nature, which ends up encouraging the phenomenon that we want to avoid in Brazil, which is political judicialization, when we are discussing precisely this week the postponement of the session of the National Congress?”, added Pacheco.
On Thursday night (26), minister Cristiano Zanin, rapporteur of the AGU action, granted an injunction suspending the two exemptions, on the grounds that Congress approved the project last year without estimating the impact on public accounts. The case was referred to the virtual plenary of the STF and, until the beginning of this afternoon, four ministers had voted in favor of maintaining the suspension.
When announcing the Senate’s appeal, Pacheco focused criticism on the federal government, mainly on the AGU. He said he was ready to respect the decisions of the Judiciary. “Judicial decisions, it is not up to us to carry out any type of attack. As much as we disagree, we respect it. It is very important that we return to the logic of respect for judicial decisions in Brazil. What surprised us was the federal government’s decision [de recorrer ao Supremo]”, he stated.
AGU’s response
In response to Pacheco’s statement, the AGU minister, Jorge Messias, issued an official note. Saying he has deep respect for Pacheco and defending the permanence of institutional dialogue, Messias highlighted that the federal government’s appeal is based on technical arguments.
“From the point of view of AGU’s institutional performance, it is necessary to point out that we presented technical legal arguments for the unconstitutionality of the so-called legislation that extended and/or created exemptions for 17 sectors and for approximately 5 thousand municipalities”, highlighted the statement.
“The AGU’s actions, therefore, in assisting the President of the Republic, will always be guided by the highest institutional respect for the Powers of the Republic and will continue in the right direction of building harmony between the Powers”, added Messias in the text.
