President of the confederation states that money saved with the mechanism serves to promote education and programs of the government itself
The president of the CNM (National Confederation of Municipalities), Paulo Ziulkoski, argues that the search for judicialization of the law about the payroll tax exemption by the government of Luiz Inácio Lula da Silva (PT) was a way of putting pressure on Congress and the entity to settle for a middle ground in relation to the issue.
“The government, through the Ministry of Finance, took this attitude to be able to negotiate now with the knife at the neck of the companies and us. Because now they are going to try to approve the cash register [os projetos sobre o tema na Câmara]“Paul said to Power360.
The federal government called the STF (Supreme Federal Court) to consider the exemption unconstitutional. Minister Cristiano Zanin, appointed by Lula, issued an injunction in favor of what the president of the republic wanted.
Releasing a sector means that it will have a reduction or exemption from taxes. In 2023, Congress approved the tax benefit for municipalities with up to 156.2 thousand inhabitants.
In practice, it makes hiring and maintaining employees cheaper. Defenders of the mechanism say that this type of practice heats up the economy and promotes job creation.
According to the president of the CNM, the money saved by the municipalities benefiting from the exemption makes it possible to improve the quality of cities and also implement federal government programs. He mentioned, for example, the employees who actively search for the Bolsa Família program.
He also said that the resources are directed to public health actions, such as vaccination: “It’s not money for the mayor’s pocket. It’s money for health and education”. Aconfirmed that the municipalities affected by Zanin’s injunction total around 5,000.
Despite the criticism, he stated that he will respect what the minister determined. “I am accepting the decision. Nobody is contesting, that if I contest I will be reached. So I have to comply, but with due respect, I cannot agree with that.”he declared.
Ziulkoski stated that the problem during the process of issuing the injunction was the lack of dialogue and the speed at which everything happened. He said that in the case of the minimum wage for nurses, minister Roberto Barroso asked for more time for analysis, so that the municipalities were able to have a more in-depth debate. “We didn’t expect [o parecer de Zanin] was so fast”he declared.
For him, the CNM’s objective after the injunction is imposed is to rush to Congress to approve PEC (Proposed Amendment to the Constitution) No. 66, which aims to propose an installment system for the cities’ pension debts with the Union.
“This affects the citizen. It is not a category, there is no mayor who is being subjected [ao benefício]. It is the population that will pay dearly for this.”
According to him, the judicialization by the Lula government took place in a “eagerness” to control fiscal adjustment. The Minister of Finance, Fernando Haddad, committed to balancing Brazil’s public accounts.
It turns out that, the way the government has implemented this strategy, the attempt to distance itself is considered unfeasible by experts. The economic team only seeks to increase revenue through tax collection, but has not presented efficient measures to cut spending from the Union’s coffers.
“They are spending in areas that perhaps do not give the expected results and now they are coming after us”he said.
LULA REQUEST
Minister Zanin’s decision responded to a request from the AGU, which is also signed by Lula, filed the day before. The government also wants to end payroll tax relief for 17 sectors of the economy. Minister Haddad had already signaled that he would take the issue to court.
The AGU action also requests that MP (provisional measure) 1,202 of 2023 be considered constitutional. The text aimed to increase revenue through some initiatives, such as the gradual end of Perse (Emergency Program for the Resumption of the Events Sector) and tax relief.
According to the government, maintaining the mechanism goes against principles of the Federal Constitution, the Fiscal Responsibility Law (complementary law 101 of 2000) and the Budget Guidelines Law. Here is the full government request (PDF – 13 MB).
