Government will revoke MP that resumes payroll taxes, says Pacheco

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Other measures included in the same text must be reissued, according to the president of Congress. When questioned afterwards, Haddad denied that a decision had already been taken. The president of the National Congress, senator Rodrigo Pacheco (PSD-MG), stated this Friday (19) at an event in Switzerland that there is an agreement built for the Luiz Inácio Lula da Silva (PT) government to revoke the provisional measure that reestablishes payroll taxation. The MP was published at the end of December and announced by the Minister of Finance, Fernando Haddad, a few weeks after Congress decided that it would extend the payroll tax exemption for 17 labor-intensive sectors. “My preference was for the exit through dialogue and political construction with Minister Fernando Haddad and President Lula. I spoke with both. And it was agreed. And here I want to say: the exemption from the payroll — despite those who agree or not with this institute, but having been a decision of the National Congress, through a law decided by Congress, and with a veto overturned and the law promulgated by me — it will be valid”, declared Pacheco. In addition to reimbursing the payroll, the MP includes other measures designed by the government to meet the goal of zero deficit in 2024 – that is, to spend only what it collected in the period. According to Pacheco, the agreement provides for these excerpts to be reissued in a new MP. “And there is a commitment from the federal government to reissue the provisional measure to revoke this provisional measure in the part that concerns the payroll tax exemption. This is the political commitment we made. And this is how it will happen and how things will go”, continued. Business entities criticize Haddad’s MP, who reinstates the payroll of 17 sectors Leaders and sectors ask Congress to return MP who reinstates the payroll Parliamentarians and entities have asked Pacheco to return the MP. Understand why: In October, the Chamber and Senate approved the extension of the payroll tax exemption for 17 sectors until 2027. The text went on to be sanctioned by President Lula – who, however, vetoed the project in its entirety. The veto returned to Congress for analysis, which reversed the decision in December and enacted the law that extended the exemption until 2027. By issuing the provisional measure, the Lula government again reversed Congress’s decision. Government is still discussing, says Haddad Asked about Pacheco’s speeches hours later, on Friday morning in Brasília, Haddad denied that there was a definitive decision. And he said he tried to talk to the president of the Senate after the statement, but was unable to contact him. The minister said that he still intends to meet with party leaders from the Chamber and Senate to discuss the issue, and that Lula must still meet with Pacheco on the same subject. “I tried to talk to President Pacheco and I couldn’t. Now, in the morning, after his speech. But I already talked to President Pacheco, President Lula and President [Arthur] Lira. I made an overview of each person’s understanding of how to proceed with this, I took the values ​​involved and the government’s idea to the consideration of the two presidents of the Houses”, he declared. “With regard to merit, with regard to re-encumbrance, we insisted that the best principle is gradual re-encumbrance, as was done with all other benefits related to taxes on consumption”, said Haddad. “And it was valid for everyone, it was valid for all special regimes in the country, including state ones, ICMS, including municipal taxes, ISS. Wouldn’t that be a good principle for a tax like the social security tax, which supports social security? So we took this to the consideration of the two presidents [Câmara e Senado] and we will discuss the best way to proceed”, he continued. Entities criticize MP At the beginning of the month, entities from the productive sector issued a note criticizing Haddad’s MP which, in practice, resumes higher taxation on labor-intensive sectors. entities state that the announced measures “increase the tax burden that falls on the productive sector, the main and fundamental generator of wealth and jobs that lead to sustainable economic and social development”. The note is signed by the Brazilian Confederation of Agriculture and Livestock (CNA ), National Confederation of Commerce of Goods, Services and Tourism (CNC), National Confederation of Industry (CNI) and National Confederation of Transport (CNT). The group claims that MP 1202 is “wrong” from an economic point of view and contradicts an “unequivocal” political will from the National Congress, as it annuls decisions both to maintain the payroll tax exemption and to overturn the Presidency of the Republic’s veto on the measure. “The payroll tax increase increases the cost of employing in Brazil and further harms the competitiveness of industry and commerce, which already face unequal competition with imports, especially with international e-commerce, which does not pay the same taxes paid by the national productive sector”, says the text. “The productive sector understands the importance of seeking to adjust public accounts so that the economy can grow in a sustained manner. However, what we have observed is the increase in public sector expenses and the search for fiscal balance with the continuous increase of the recipe”, the note continues. Congress overturns presidential veto on payroll tax relief for 17 sectors of the economy

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