Bolsonaro’s exemption for pastors is the target of Revenue and TCU – 03/28/2023 – Power

The tax exemption for evangelical pastors published by the Federal Revenue on the eve of the 2022 election campaign, during the Jair Bolsonaro (PL) government, is undergoing internal reassessment by the Tax Authorities under suspicion of having occurred in an atypical way.

ADI (Interpretative Declaratory Act) No. 1, of July 29, 2022, extended the scope of the social security exemption to pastors —a strong core of support for Bolsonaro, then a candidate for reelection— and is also under investigation by the TCU (Tribunal de Contas da Unity).

After the inauguration of Luiz Inácio Lula da Silva (PT), this declaratory act was considered atypical by members of the Tax Authorities and is now undergoing a new analysis by the body. At the end of this procedure, the regulation may be totally or partially revised.

One of the points detected, according to those involved in the analysis, is that the edition of the act did not go through the technical analysis of the undersecretary of taxation of the Internal Revenue Service.

The ADI was signed by Julio Cesar Vieira Gomes, then head of the Treasury. Currently, he is also in the crosshairs of the investigation into Bolsonaro’s attempt to recover the jewels presented by Saudi Arabia and seized at the airport in Guarulhos (SP).

Julio Cesar denies that there was any atypicality in the act and says that all the norms of his management were regular and followed the proper procedure.

The Revenue sent information about the case to the TCU in February this year.

The court had opened a procedure in 2022 to investigate possible irregularities in the edition of the ADI and requested information from the Tax Authorities.

On March 17, the TCU’s Secretariat for External Control of Public Accounts requested additional information from the Revenue Service.

Among them, clarifications on whether the act did not exceed the power of the regulatory body, considering that the “tax exemption must be interpreted literally, under the terms of the National Tax Code”.

Bolsonaro mentioned the Tax Authorities’ ADI in his first campaign act, a meeting with religious leaders in Juiz de Fora (MG) on August 16.

On the occasion, he began his speech by responding to a request for a solution to Revenue collections. “The claim has already been accepted, [o ato] is published in the Official Gazette of the Union”, said the president, adding that the measure was still not being fulfilled due to “persecution” of the pastors.

Behind the act edited by the government of Jair Bolsonaro is the prebend, remuneration received by pastors and religious leaders for services rendered to churches.

The law exempts prebends from collecting social security contributions, provided they are related to religious activity and do not depend on the nature or amount of work.

The Revenue, however, has detected in recent years that some churches have used the prebend to circumvent inspection and distribute a kind of profit sharing to pastors who gather the largest groups of believers (benefiting leaders of temples in large cities or neighborhoods, for example). or the highest tithe collections.

The tax authorities applied millionaire fines and demanded the payment of a social security rate of 20% on amounts paid to pastors, directors and religious leaders. The auditors’ understanding was that the exemption did not apply to variable compensation mechanisms.

From then on, the quest for tax forgiveness and the relaxation of rules became a priority agenda for the evangelical group in the National Congress.

In 2015, in the Dilma Rousseff (PT) government, a first law stipulated that differentiated values, paid in cash or as help with the cost of housing, transportation and educational training would also be exempt from taxation.

The tax authorities reacted by demanding receipts for these expenses and fined anyone who failed to prove the nature of the expenses.

The Revenue also adopted the understanding that the new law was not retroactive, that is, the fines issued before its publication continued to be valid.

In 2020, Bolsonaro signed a law that expressly provided for the retroactivity of the broader social security exemption on the prebend. The intention was to amnesty the fines that still hung over allied pastors.

However, the controversy within the scope of inspection continued, since, according to government officials, the auditors did not see any change in the scope of the exemptions.

In September 2021, for example, a consultation solution published by the General Coordination of Taxation stated that, if payment by the institution is made with characteristics inherent to remuneration for services provided by the minister of religious confession, the amount received should be considered in the basis for calculating the social security contribution.

The same understanding would apply to amounts paid “in excess of what is necessary for the person’s subsistence”.

Maintaining the fines was even classified by Bolsonaro as persecution of evangelicals. In this context, the ADI was signed by the then Revenue Secretary.

The act says that the payment of differentiated amounts, in amount or form, “does not characterize these amounts as remuneration subject to contribution”. In the text, “seniority in the institution, level of education, irreducibility of values, number of dependents, hierarchical position and place of residence” are cited as differentiating factors.

The norm also says that only the portion paid under conditions “provenly” related to the nature and quantity of work performed will be considered taxable remuneration.

As it is signed by the special secretary, the document supersedes any divergent consultation solution on the subject.

At the time the act was published, the Sindifisco Nacional (Union of Tax Auditors of the Federal Revenue) said that the measure “extrapolates the competence of the Federal Revenue for normative acts”.

“By reducing the conditions for what is considered remuneration for the purposes of social security incidence, the Federal Revenue makes more remunerations considered exempt. social security”, said the union of auditors.

Last year, the public list of debtors registered in the Union’s Active Debt indicated religious entities with a debt of R$ 1 billion, of which R$ 951 million related to Social Security.

Secretary states that all acts of his management followed the rules in force

Julio Cesar Vieira Gomes, who was Federal Revenue Secretary from December 2021 to December 2022, stated that all normative acts adopted in his management followed the rules, with regular processing in the internal bodies.

“The procedure adopted in the preparation of all normative acts has always observed the rules in force, with regular processing by the competent technical bodies”, he said, in a note.

Last year, the Revenue had released a note stating that the ADI “only consolidated in a single document the understanding already in force on this matter, which was already conveyed by law and various legal diplomas, such as Consultation Solutions and Opinions”, adding that the diversity of documents was generating internal disagreements.

“In this way, the consolidation of the understanding in a single rule made it possible to optimize publicity, both for tax auditors and for taxpayers, bringing gains in legal certainty, reduction of litigation and compliance.”

A Sheet failed to contact Jair Bolsonaro.

The Ministry of Finance did not comment.