Federal Revenue cancels tax exemption for pastors granted by Bolsonaro

The Bolsonaro government’s decision that guaranteed tax exemption on salaries of religious ministers, such as pastors and priests, was suspended this Wednesday (17) by the Federal Revenue Secretary, Robinson Barreirinhas. The suspension complies with a recommendation from the Public Ministry to the Federal Audit Court (TCU).

The TCU considered the granting of the exemption to religious leaders to be atypical because it would not have passed the scrutiny of the Revenue’s sub-secretariat of taxation. The investigation into the procedure began in March last year, when the Federal Revenue Service began to suspect tax evasion.

The Interpretative Declaratory Act that granted the benefit was signed in July 2022 by Julio César Vieira Gomes, former head of the Federal Revenue Service. The measure provided for tax exemption on salaries and remunerations paid by churches to religious leaders.

“In compliance with the determination proposed by the Public Prosecutor’s Office before the TCU (MPTCU), the Federal Revenue suspended the effectiveness of RFB Interpretative Declaratory Act No. 1, of July 29, 2022, which provided for the amounts spent on ministers of religious confession, with the members of an institute of consecrated life, congregation or religious order, under the terms set out in the legislation relating to taxation”, said the Revenue in a note.

With the suspension of the benefit, the amounts paid by churches to pastors and vocational institutions are once again considered direct remuneration, which requires the payment of social security contributions. Previously, only the portions of payment relating to classes or work activity itself were considered remuneration. The issue revolves around the so-called prebend, as the remuneration paid to the pastor or leader of the religious ministry for their services is called.

The Bolsonaro government’s act then said that the payment of different amounts, in amount or form, “does not characterize these amounts as remuneration subject to contribution”.

By suspending the benefit, the Lula government creates a “split” with the evangelical bench and some deputies point out that the measure removes the possibility of guaranteeing support from evangelical parliamentarians in the votes of the National Congress and in this year’s elections.