City halls expect to save R$11 billion after overturning veto

The overturn of President Luiz Inácio Lula da Silva’s (PT) veto, which reestablished the extension of the payroll tax exemption until the end of 2027, also benefited around 5,300 Brazilian city halls that will have their employer’s social security contribution rate reduced by 20% to 8%.

The item was a “jabuti” inserted in the exemption proposal after pressure from the National Confederation of Municipalities (CMN), which demanded help from the government to resolve the deficit in the public accounts of the municipalities, which claimed to have more and more demands without due transfer. of Union resources.

The reestablishment of the article in the law will generate savings of R$11 billion per year, according to the entity’s president, Paulo Ziulkoski. He states that the measure is still the final solution, but it already represents an important advance.

“It’s not the solution, but it’s an important step forward. And we will maintain our work in search of a fairer and more effective federative pact,” he stated. A CNM survey on the payment of the 13th salary of municipal civil servants revealed that 46.7% of managers are pessimistic for 2024.

According to the CMN, among the states that will have the biggest savings with the measure are São Paulo (R$ 1.5 billion), Minas Gerais (R$ 1.3 billion) and Bahia (R$ 1.1 billion).

Also according to Ziulkoski, the change in employer contributions will be valid for municipalities with a population of up to 156.2 thousand inhabitants, with no expiration date. The president of the association also highlighted that the movement managed to forward more than R$30 billion in benefits to municipalities this year.

In addition to the reestablishment of the measure, R$ 4.2 billion is also worth highlighting for the restoration of the Municipal Participation Fund (FPM), R$ 2.3 billion with the anticipation of ICMS, and an additional saving of R$ 12.8 billion relating to the payment of the nursing floor.

The overturn of Lula’s veto had 60 votes in favor in the Senate and 378 in the Chamber, and mobilized opposition benches and some deputies from the government base, sectors of society and even trade unions, who stated that the measure could result in the loss of jobs .

Despite the broad support in society and in Congress, Minister Fernando Haddad, of Finance, stated that he intends to legalize the issue, claiming that the law in force since 2011 is unconstitutional.