CUT comes out in defense of Lula’s veto on payroll tax relief

The Central Única dos Trabalhadores (CUT) defended President Luiz Inácio Lula da Silva’s (PT) veto of PL 334/23, which extends the payroll tax relief policy in 17 sectors for another 4 years. The position goes against the three largest Brazilian unions that criticized Lula for the veto.

According to the CUT, the measures affect the working class and therefore argue that they should be “widely discussed and negotiated between the parties involved”. “The payroll tax relief as approved by the National Congress did not establish any type of guarantees or compensation that jobs and rights would be maintained while the tax incentive was in force”, points out the center.

The CUT also criticizes the “intransigent defense” of payroll tax relief in 17 sectors “under the argument of job protection is not sustainable”. The entity said that the project “means the withdrawal of resources that finance Social Security, which underwent profound reform in 2019, under the argument that there was a lack of resources for its financing.”

In the note, signed by the president of CUT, Sergio Nobre, the entity said that while the exemption was in force, “the benefiting companies did not even commit to maintaining employment levels”. “Since they were exempted in 2011, the 17 sectors have maintained their hiring and firing movements linked to market variations”, explains CUT.

“President Lula’s veto of the bill that extended the exemption gives us the opportunity to better debate this issue and, in the continuity of debates on tax reform, find a better path towards a fairer and more progressive tax system, which benefits Brazilian society as a whole and not specific sectors”, concludes the CUT.

The CUT’s statements go against the position of the central Força Sindical, União Geral dos Trabalhadores (UGT) and Central dos Sindicatos Brasileiros (CSB) – entities that are historical supporters of Lula. For these entities, the veto on the extension of the exemption puts “millions of jobs” at risk and “encourages the precariousness of the labor market”.