“I don’t believe in sectoral exemptions”, says Labor Minister about Lula’s veto

The Minister of Labor and Employment, Luiz Marinho, stated this Tuesday (28) that exemptions for specific sectors do not generate jobs for the country, but rather the demand for production. Congress approved the extension of payroll tax relief until 2027 for 17 sectors of the economy, but President Luiz Inácio Lula da Silva (PT) vetoed the project in its entirety. Now, it is up to Congress to decide whether to maintain or overturn the presidential veto. Marinho said he has nothing against the measure, however, he does not believe in “sectoral exemption”.

Parliamentarians, businesspeople and trade unions criticized the president’s decision. The affected sectors point out that the measure could generate unemployment. For Marinho, what generates job vacancies is the good functioning of the economy, motivated by the increase in demand for production. “Congress is implementing a tax reform plan, I think it is nonsense to talk about tax exemptions for sectors”, defended the minister during a press conference to announce the figures for the New General Register of Employed and Unemployed People (Caged).

“It is necessary, in tax reform, to seek and plan in such a way that it provides a solution for the economy as a whole and, within this, observe sectors that eventually require further attention. But, choosing sectors with the justification [apresentada] job creation, I don’t believe it. What creates jobs is not lower wages in this or that sector, nor is it a tax incentive for this or that sector. What generates greater employment is if the economy is demanding more production,” he said.

According to Marinho, a company will not hire or fire based on eventualities. “Incentives, for example, for hiring young people, may eventually cause companies to change workers motivated by this incentive. It will then replace the workforce. It will not generate jobs,” he added.

The minister compared the current discussion with the labor reform implemented during the Temer government, reported the Brazil Agency. “They dismantled labor legislation, promising mass job creation, but what happened was the precariousness of work. That’s why we need to look at the whole economy, which needs to grow in a healthy, permanent and continuous way. Chicken flights do not solve the economy’s problem,” he highlighted.