The Senate appealed early this Friday night (26) to the Federal Supreme Court (STF) to suspend the individual decision of Minister Cristiano Zanin that overturned the tax exemption on payroll in 17 sectors of the economy and certain municipalities until 2027. 
In the petition, the House’s lawyers ask Zanin to revoke the injunction that overturned the exemption. The decision was made this Thursday (26) and was motivated by an action filed by the Attorney General’s Office (AGU).
According to the Senate’s legal team, the exemption does not cause losses to public accounts. The House argues that federal revenue broke a record in the first three months of this year, reaching R$657 billion.
“The conclusion that the law in question has somehow imposed excessive or unreasonable spending on the Executive, or that it could cause the depletion of the Union’s fiscal regime, is unmistakably wrong,” argued the lawyers.
Cristiano Zanin’s injunction is being judged in the Court’s virtual plenary session. So far, the score is 4-0 to maintain the exemption’s overturn.
AGU action
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.
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.
Earlier, the president of the Senate, Rodrigo Pacheco (PSD-MG) classified the AGU’s decision 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.
