Early revocation of Perse: the importance of the Judiciary in controlling legality – 04/16/2024 – What tax is this

Since the beginning of the year, the attempt to early repeal of Perse by the federal government has generated intense controversies in the Judiciary and Legislature, but the results are still uncertain.

Perse was established in 2022, with the aim of recovering the events and tourism sectors that were seriously damaged in the pandemic. Among the benefits granted, the highlight is the reduction to 0% (zero) of the rates of the main federal taxes (IRPJ, CSLL, PIS and COFINS), for a period of 5 years, that is, until 2027.

It turns out that, at the end of 2023, the program’s beneficiaries were surprised by the publication of Provisional Measure No. 1,202, which unilaterally and due to the federal government’s tax revenue interests in meeting the 2024 fiscal target, determined the early repeal of the zero rate from now on. from April 1st of this year, with the exception of IRPJ, which will take place from January 1st, 2025.

According to the Ministry of Finance, the justification for Perse’s revocation is that the program was being used improperly by several companies and would be generating a loss of revenue much higher than initially anticipated. According to data released by the Federal Revenue, the annual tax waiver, in 2022, reached R$10.8 billion and, in 2023, R$13.1 billion.

Although such projections may still be challenged, the relevant economic impact on both federal revenue and companies benefiting from Perse is undeniable.

In this scenario, in the absence of a consensus, the only appropriate path to resolve this conflict must be in the legal field, regarding the analysis of the legality and constitutionality of the intended early revocation.

Regarding this topic, the National Tax Code prescribes in its article 178 that the exemption granted for a “certain period” and “in accordance with certain conditions” cannot be revoked at any time. From this perspective, it is worth checking whether Perse meets the legal requirements that prohibit the early revocation of tax benefits.

Although the law mentions the “exemption”, which has a legal nature distinct from the “zero rate”, it is common ground in the Superior Courts that the rule applies to both types, as the economic repercussion of tax relief for the taxpayer is the same.

Regarding the first requirement, that the grant of the benefit has been given for a “certain period”, Law No. 14,148/2021, which established Perse, leaves no room for discussion, as it is express that the benefit would be granted for the period 60 months.

However, in relation to the second requirement that the benefit has been granted “in accordance with certain conditions”, there is a relevant legal controversy. This is because, in 1969, the STF (Federal Supreme Court) approved Precedent 544, which states that tax exemptions granted, under onerous conditions, cannot be freely suppressed. It is worth highlighting that art. 178 of the CTN (1975) is subsequent to the approval of Precedent 544 and does not refer to the “onerous condition” criterion, but rather to the broader term of “certain conditions”.

However, it is precisely based on the supposed absence of an “onerous condition” that the Union defends the legality of the early revocation of Perse, the basis of which has unfortunately already been partially accepted by the Judiciary.

However, what is happening is a distortion of the concept of “onerous condition”, which states that in order to constitute onerousness, some financial compensation or a reduction in the profit of the beneficiary of the tax incentive would be necessary.

On the subject, the Superior Court of Justice (STJ), when analyzing the repeal of the zero rate of the Lei do Bem, for example, recognized that in order to constitute onerousness, it is necessary that the enjoyment of the benefit be linked to certain counterparts from the taxpayer who intends the benefit (eg REsp. 1,845,082 and 1,987,675).

Based on this understanding, the Perse Law must be analyzed, which presents several conditions for the enjoyment of the benefit, among which the requirement that revenues benefiting from the zero rate be obtained directly from activities in the events sector stands out. and tourism.

In other words, the main consideration for enjoying the benefit is that the beneficiaries actually invest in the encouraged activity and recover the affected economic sector, which is essential for the country’s growth. In this regard, there are even studies that prove the direct benefits of Perse in the recovery of the event and tourism sector and consequently for the country’s economic growth.

This is demonstrated, for example, by research carried out by Fundação Dom Cabral (“FDC”), which concluded, after analyzing various data from the sector, that, since the implementation of Perse, “the tourism and events sector demonstrates vigor in capacity for recovery and job creation” and that “the maintenance of laws like Perse is an important step to guarantee the country’s economic recovery and the well-being of its citizens”.

And that’s not all, from a constitutional point of view, there are also several principles that guarantee the taxpayer’s right to maintain the tax benefit for the period originally granted, such as the protection of the taxpayer’s legitimate trust in Public Administration, non-surprise, acquired right, legal certainty and good faith.

It is not discussed here that the granting of tax incentives must always be carefully evaluated by the Public Authorities, through economic and financial analyses, which take into account the counterparts and actual gains for society as a whole, so that small interest groups are not privileged to the detriment of the public interest.

However, abruptly revoking an incentive established through the legitimate legislative process and granted for a certain period goes against the trust that taxpayers expect to have in public administration and the legal certainty that should guide the State’s relationship with the private sector. . After all, many companies planned financially, made investments and hired considering the tax incentive granted until 2027.

Although the federal government’s concern about companies that are defrauding or improperly using Perse is legitimate, the appropriate measure to solve the problem is to identify the offenders and recover the tax credit due and not indiscriminately revoke the benefit, including for the taxpayers they serve. the requirements and purposes of the Law.

In this sense, the Federal Revenue itself released its “Annual Inspection Report” this month, which, among the priority topics for 2024, is the inspection and self-regularization of taxpayers who improperly adhered to Perse.

Furthermore, in parallel to the legal discussions, Bill no. 1,026/2024, initiated by the Chamber of Deputies, which aims to protect certain sectors and seek consensus between the Federal Government and the private sector.

Despite the legislative procedures still in progress, in relation to companies that are not included in the negotiations, the Judiciary will have the final say and it is expected that the evolution of the discussions will occur from a strictly legal perspective, exalting the role and importance of the Judiciary in controlling legality.