The Federal Supreme Court (STF) has a score of 3 votes to 0 to maintain Minister Cristiano Zanin’s individual decision that overturned the exemption from payroll taxes in 17 sectors of the economy and certain municipalities until 2027.
The decision was made this Thursday (25) and was motivated by an action filed by the Attorney General’s Office (AGU).
So far, in addition to Zanin, ministers Flávio Dino and Gilmar Mendes have also voted in the Court’s virtual plenary to suspend the exemption. The electronic session runs until May 6th.
In the action filed with the STF, the AGU maintained that the exemption was extended until 2027 by Congress without establishing the financial impact of the tax exemption. The petition was signed by President Luiz Inácio Lula da Silva and the Attorney General of the Union (AGU), Jorge Messias.
President of the Senate, Rodrigo Pacheco. Photograph Lula Marques/ Agência Brasil
The action also contested the decision of the president of the Senate, Rodrigo Pacheco (PSD-MG), which invalidated the section of Provisional Measure (MP) 1.202/2023. The MP overturned social security exemptions for small and medium-sized municipalities.
By accepting the AGU’s arguments, minister Cristiano Zanin understood that the approval of the exemption by Congress did not indicate the financial impact on public accounts.
“The factual framework presented, including the issuance of subsequent provisional measures with the aim of reducing the imbalance in public accounts, indicates, in this preliminary judgment, that there is an urgency to avoid a true fiscal imbalance of billion-dollar proportions that will be difficult to resolve if control comes to be done only at the end of the judgment on the merits”, explained Zanin.
The payroll tax exemption for 17 sectors and municipalities with up to 156 thousand inhabitants was approved by Congress, however, the bill was vetoed by President Lula. Then Congress overturned the veto.
This morning, the president of the Senate announced that the House will appeal Zanin’s decision this Friday.
