Senate appeals to the STF to maintain payroll relief for companies and municipalities | Policy

The Senate presented on Friday night (26) an appeal that aims to resume the validity of the payroll tax exemption law of companies and municipalities.

This Thursday (25), Minister Cristiano Zanin, of the Federal Supreme Court (STF), suspended the rule, approved by Congress last year and which would be valid until the end of 2027.

The court’s virtual plenary will analyze, until May 6, the minister’s decision, which occurred following a request from the government, through the Attorney General’s Office (AGU).

Congress and sectors react to the temporary suspension of payroll tax relief

Zanin interrupted the effectiveness of the law until the fiscal impact, that is, the cost to public coffers is indicated. According to the minister, there is a risk that the measure will cause an imbalance in the government’s accounts and an “emptying of the fiscal regime”.

The president of the Senate, Rodrigo Pacheco (PSD-MG), in an interview this Friday, disagreed with Zanin’s decision and also classified the AGU’s petition as “catastrophic”.

The senator argued that Congress approved proposals this year that add up to around R$80 billion in increased revenue. According to him, this amount will be used to pay, for example, the R$ 10 billion related to tax relief for municipalities — annual cost.

Pacheco explained that the measure, for companies, is not a “new fact” as it has existed since 2011 and is responsible for the “survival of sectors that generated more employment than the average of other sectors nationally”.

“If we, when we voted on Carf, sports betting, offshores, exclusive funds, ICMS subsidies, fiscal framework, identified that it was necessary to write this in each of these projects, we would have written it. There would be no problem linking any type of revenue of this nature to be able to help the municipalities of Brazil. And this will certainly happen because we will not give up defending the municipalities, the sectors of the Economy”, said the president of Congress.

The rule allows companies to 17 sectors replace social security contributions, 20% on employees’ salaries, at a rate on the enterprise’s gross revenue, which varies from 1% to 4.5%, depending on the sector and service provided. This possibility, according to the approved proposal, will be valid until December 31, 2027.

In practice, substitution allows companies pay a lower amount of tax and, based on the relief in their bills, they are able to hire more employees.

According to the Movimento Desonera Brasil, which brings together representatives of the benefiting sectors, the theme impacts 8.9 million direct formal jobsin addition to millions of other jobs derived from the production network of these companies.

Among the 17 categories covered by the project are:

• industry (leather, footwear, clothing, textiles, animal protein, machinery and equipment);
• services (IT & ICT, call center, communication);
• transport (freight road, urban passenger road and metro rail);
• construction (civil and heavy construction).

The matter also reduces from 20% to 8% the rate of the employer’s social security contribution, which is levied on employees’ salaries, paid by small municipalities.

The standard applies for city halls which do not receive the reserve quota from the Municipal Participation Fund (FPM) and affects more than 3,000 municipalities.