Haddad backs down, accepts events sector program outside of MP and prepares bill – 03/05/2024 – Market

The Minister of Finance, Fernando Haddad, retreated from the decision to extinguish Perse (Emergency Program for the Resumption of the Events Sector) through an MP (provisional measure) sent to the National Congress and stated, this Tuesday (5), that he will send a bill with constitutional urgency to develop a “more focused” program.

The minister participated in a morning meeting with leaders of the Chamber of Deputies and the president of the House, Arthur Lira (PP-AL).

“We left the meeting now with the homework of designing how to address these exclusions and with a focus on any segments that have not yet been recovered,” stated Haddad.

According to him, the idea is to carry out a Perse with a “focused vision”. “Focused on those segments that still require some care,” he said.

In December, the federal government sent an MP to Congress that, among other things, extinguished Perse, generating strong criticism among parliamentarians.

Author of the bill that gave rise to Perse, deputy Felipe Carreras (PSB-PE), who was at the meeting, stated that the idea is for the program to be redesigned “by several hands”, with input from parliamentarians and representatives of the sector.

“Based on the bill, we will discuss it again with filters, locks, in short, so that we can make Perse within its nature for what it was proposed, for those who essentially have the right. We were unanimous in saying [que é para] punish anyone who has used Perse incorrectly or incorrectly. Any type of possible fraud must be severely and exemplarily punished”, stated Carreras.

The deputy also said that the idea is that the PL “will be processed until the end of March”.

“It’s not going to be exactly the way it is [hoje na MP] because the way it was it was not going to prosper, this was quite assimilated by the minister and the president of the Chamber. Through common political sense, another text will be sent, which will be remodeled by several hands, by leaders, by the productive sector, by the Ministry of Finance, to come up with a consensus text”, said Carreras.

Such as Sheet revealed, in January Haddad warned Congress leaders that the program would have opened space for money laundering operations from illicit activities in the country.

According to reports from participants in this Tuesday’s meeting, the topic was treated by the minister superficially, without giving more details or presenting data about it.

Haddad stated that the MP, however, will be maintained. “The MP will remain as it is, with that suppression that was made at the request of President Rodrigo Pacheco,” he said.

“We are going to forward a project in relation to the municipalities and Perse with the discussion that was held with the leaders, who made several suggestions to reduce what they themselves recognized as a complete lack of government control”, he added.

Maintaining the processing of the old MP is important for the economic team to be able to account for the increase in revenue expected with the end of Perse in the bimonthly Budget evaluation report, to be sent to Congress on March 22nd.

It is this report that will define how much spending will need to be blocked to meet the fiscal target of closing the public account deficit in 2024.

According to the Treasury’s calculations, the end of Perse would yield R$6 billion more in revenue this year, because much of the end of the exemption from federal taxes would only come into force in 2025.

The minister stated that, last year, the loss of revenue from Perse was “more than R$13 billion”. Haddad said that “any inconsistencies in the taxpayers’ own reports” were removed from this amount. The minister did not detail what these inconsistencies would be.

The value, however, is lower than the R$17 billion that Haddad had been citing, in recent weeks, as a tax waiver with the program in 2023. According to him, in 2022, the waiver was R$10 billion.

The minister highlighted that the cost of the program in 2022 and 2023 (R$23 billion) has already reached the value of the total waiver of R$25 billion from the agreement made with Congress for the program. “We have already reached the mark of almost R$25 billion in the agreement. And that is what I took to President Lira’s consideration,” he said.

Since the government’s decision to end Perse, the president of the Chamber has demanded that the minister comply with the agreement.

Haddad said he ordered the IRS to do a thorough fine-tooth comb to calculate the cost of Perse. He considered that not every taxpayer, who fails to pay a tax, informs why they are failing to collect it.

To design Perse’s new taxation model, the Ministry of Finance is carrying out a study that aims to identify which segments within the events sector have not yet managed to recover.

When talking about the increase in revenue of companies benefiting from Perse after the end of the pandemic, the minister ended up giving a clue as to how the program could be reformulated. He said that there are 11 thousand companies benefiting from the program.

He drew attention to the fact that companies’ revenue before the pandemic, in 2019, was R$146 billion, fell to R$101 billion and then rose to R$200 billion, in 2022.

The data shows that the sector has already recovered or more companies are benefiting from a tax incentive that, in practice, was not designed for them.

With this data, the minister signaled that revenue should be an indicator to define which companies will be able to continue with the benefit.

The Perse benefit eliminates all federal taxes (IRPJ, CSLL, PIS and Cofins) in a sector that has already recovered and continues to grow. It is based on this argument that the economic team tried unsuccessfully to convince senators and deputies to end the program.

The minister said he does not yet know what the compensatory measure will be for maintaining Perse and ensuring compliance with the zero deficit target for public accounts.