House starts voting on project with pro-government rule in CARF trials

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The proposal, which is a priority for Lula’s economic team, was urgently sent to Congress in May by the Executive. Still this Friday, the Chamber should vote on a new fiscal framework. After completing the vote on the tax reform, the Chamber began, around 3 pm this Friday (7), the analysis of the project that establishes a rule favorable to the government in the event of ties in judgments at the Tax Appeals Administration Council (Carf ). Carf judges disputes between taxpayers and the tax authorities. The project resumes the so-called “quality vote” in the judgments of the body, linked to the Ministry of Finance. The mechanism establishes that, in cases of a tie, the president of the collegiate must break the tie. As the position is reserved for a representative of the National Treasury, in theory, the Tax Authorities will benefit. The text was sent by the government to Congress with constitutional urgency in May. As it was not voted on in 45 days, it started to lock the voting agenda in the Chamber. The changes in the rules are a central part of the economic area’s package to get around the public deficit forecast this year, of R$ 231.5 billion. According to the economic team’s calculations, the federal government could collect up to R$ 50 billion with the changes originally proposed in the project – a collection considered essential in the midst of the new fiscal rule, which links the increase in expenses to the increase in collection. As there were changes in the original text, which should favor taxpayers, the revenue projection can be changed. New fiscal rule Also this Friday, deputies should vote on the project for the new fiscal framework. The new rule will replace the current spending cap – which limits spending growth to the previous year’s inflation. The so-called “fiscal framework” has already been approved once by the Chamber. But, as it was changed in the Senate, it needs to undergo a new analysis by the deputies. The measure, if approved, will release the federal government to carry out more expenses.

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