President Luiz Inácio Lula da Silva criticized, this Wednesday (1st), the maintenance of payroll tax relief for 17 sectors of the economy. During an event held by trade unions, in celebration of Labor Day, in São Paulo, Lula said that “there will be no exemption to favor the richest”.
At the end of last year, the National Congress approved the tax relief bill that extends, until 2027, the exchange of social security contributions – corresponding to 20% of the payroll – for a rate between 1% and 4.5% on the gross revenue of companies in 17 sectors of the economy. The project also cut the rate of INSS contributions from municipalities with up to 156 thousand inhabitants from 20% to 8%.
“We do tax relief when the poor people, we win when the worker wins, but we do tax relief without them even committing to creating a job, without them even committing to providing a guarantee for those who are working. I want to say that in our country there will be no tax relief to favor the richest, but rather to favor those who work and live on wages”, said Lula.
President Lula vetoed the project, but Congress overturned the veto in December last year, maintaining the benefit for companies. For Lula, the measure does not guarantee the creation of jobs and there can be no relief from company payrolls without compensation for workers.
The payroll tax exemption has an impact of around R$9 billion per year on Social Security. Aid to small municipalities will mean that the government will no longer collect R$10 billion per year.
The government appealed to the Federal Supreme Court and the action has a score of 5 to 0 in the Court to suspend the exemption. For the Minister of Finance, Fernando Haddad, it is necessary to find a way to avoid losses to Social Security. “Social Security revenue is sacred to pay retirees. You can’t play with this thing,” he said this week.
Income tax
During the event with workers in São Paulo, Lula sanctioned Bill No. 81/2024, which corrects the Income Tax table, increasing the exemption for those who receive up to two minimum wages per month. He reaffirmed his promise that, by the end of his term in 2026, he would approve exemption from paying income tax for those earning up to R$5,000 per month.
“This country will treat the 203 million men and women who live in this country with great respect. The Brazilian economy has started to grow again, salaries have started to grow again, income tax, I promised you that until the end of my term, up to R$5,000 people will not pay income tax. And I’m telling you the word continues to stand”, he said, highlighting the coordination of his ministers with the National Congress in approving measures of interest to the government.
“This is how we carried out, for the first time in the era of democracy, the tax reform in which we are going to decriminalize the middle class person who pays a lot and make the very rich pay a little of the Income Tax in this country because only the poor pay. In this Income Tax proposal, all food in the basic food basket will be exempt and there will be no Income Tax on food for the working people of this country”, he added.
Furthermore, Lula signed the decree promulgating the Convention and Recommendation on Decent Work for Domestic Workers.
Act emptied
The event in São Paulo was held in the parking lot of the Neo Química Arena (Corinthians stadium), in the east zone of the capital of São Paulo. For the first time, the celebration was no longer held in the central region of the city, in the well-known Vale do Anhangabaú.
During his speech, Lula commented on the empty nature of the event and accused the minister of the General Secretariat of the Presidency, Márcio Macêdo, responsible for the government’s coordination with social movements.
“Don’t think it’s going to stay like this. You know that yesterday I talked to him about this act and I said to him, ‘Márcio, the act was poorly organized, we didn’t make the necessary effort to take the number of people that needed to take.’ But, anyway, I’m used to talking to a thousand, 1 million, but also, if necessary, I only talk to a wonderful lady who is there in front of me”, said Lula.
For the sixth year in a row, Labor Day political events across the country are organized, in a unified manner, by the unions CUT, Força Sindical, UGT, CTB, NCST, CSB and Intersindical Central da Classe Trabalhadora. Shows and cultural presentations are also part of the program.
“Under the theme For a Fairer Brazil, May 1st 2024 will be a day of celebration and reflection to bring to the entire Brazilian population the struggle of the trade union movement in defense of the working class”, informed the CUT. Among the entities’ agendas are decent employment, correction of the Income Tax table, lower interest rates, appreciation of service and public servants, equal pay and dignified retirement.
Election campaign
Pre-candidate for Mayor of São Paulo, federal deputy Guilherme Boulos (Psol-SP) was present at the Labor Day event alongside President Lula, who asked for votes for the ally in the municipal elections in October this year. “I’m going to make an appeal, every person who voted for Lula in 89, in 94, in 98, in 2006, in 2010, in 2022, has to vote for Boulos for mayor of São Paulo”, said the president.
Lula and Boulos participate in the Labor Day Union Centrals Act, at Arena Neo Química at Corinthians. Photograph – Paulo Pinto/Agência Brasil
“This young man, he is fighting a real war here in São Paulo. He is competing against our national opponent, he is competing against our state opponent and he is competing against our municipal opponent. He is facing three opponents. And, therefore, I want to tell you, no one will defeat this young man here if you vote for Boulos for mayor of São Paulo in the next elections”, added Lula.
Before the event, President Lula visited the Corinthians Stadium, received by the club’s president, Augusto Melo, and former players Basílio, Edilson and Zé Maria. Lula is expected to return to Brasília this Wednesday afternoon.
