Government issues “note of gratitude” to the STF after obtaining decision in action on court orders

The Lula government released this Monday (4) a note to express “satisfaction with the conclusion of the trial” at the Federal Supreme Court (STF) which authorized the payment of court orders without violating tax rules until 2026. The “note of gratitude ” was made jointly by the ministries of Finance, Planning, Management and Innovation, Civil House and Attorney General of the Union (AGU).

On December 1st, ministers analyzed a government request to change the rules for payments due due to final court rulings. The score was 9 votes to 1. With the favorable decision, the government will pay R$95 billion from the stock of court orders through extraordinary credits in 2023 and the resources will not be included in the calculation of the fiscal target.

“The decision also represents a recovery of the dignity of Justice and the effectiveness of the Judiciary’s decisions, in addition to expressing a commitment to legal security”, say the ministries. The payment of precatório gives strength to the government in an attempt to reach the fiscal target scheduled for 2024. The Union has counted on the help of decisions from the Superior Court of Justice (STJ) and the STF to reinforce the National Treasury’s cash flow.

The government emerged victorious in ten of the 14 tax trials carried out in the first half of 2023, according to a survey carried out by Cascione Advogados and Machado Associados, published by the newspaper Economic value. Together, these decisions favorable to the Treasury have the potential to generate additional revenue of up to R$210.8 billion.

“The decision also honors Parliament’s role in defining the budgetary space, as it preserves the Sustainable Fiscal Regime, approved by the National Congress, providing that the settlement of liabilities created by the aforementioned constitutional amendments will be made through extraordinary credits – not accounted for in the expenditure limits, in accordance with Complementary Law No. 200, of 2023 – which will be submitted to Parliament for consideration in due course by sending provisional measures”, says the note from the departments.

The Supreme Court must still judge other economic issues of interest to the government, such as the change in the State Law, the decision on government representation in the privatized Eletrobras and the correction of the Severance Indemnity Fund (FGTS) for savings. Furthermore, the expectation is that the Minister of Justice, Flávio Dino, nominated by President Luiz Inácio Lula da Silva (PT) to occupy a seat on the Court, will be approved by the Senate, strengthening the judgment of topics of interest to the government.

“The decision, therefore, signals the consolidation of harmony and good understanding between the Powers of the Republic, as recommended by art. 2 of the Constitution. Therefore, it is worth noting the sensitivity and public spirit of the unanimity of the ministers of the Federal Supreme Court, understanding the urgency of resolving the issue of court orders. Furthermore, they understood that the decision did not need to result in the sacrifice of public policies already addressed by the current administration”, highlighted the ministries about the decision of the court orders.

The note was signed by ministers Simone Tebet (Planning); Jorge Messias (AGU), Dario Durigan (substitute for Finance), Cristina Mori (substitute for Management and Innovation in Public Services), and Bruno Moretti (substitute for the Civil House). The ministers holding some portfolios fulfill an international agenda with President Lula.