Lula government suspended benefits for pastors after warning – 01/18/2024 – Power

The Federal Revenue Service suspended the effectiveness of the expansion of tax benefits for pastors, adopted during the administration of Jair Bolsonaro (PL), under pressure from the TCU (Federal Audit Court).

The technical area of ​​the control body recommended, on December 14, 2023, issuing a determination to the government to suspend the act, published by the Revenue on the eve of the 2022 electoral campaign.

The rapporteur of the action at the TCU, minister Aroldo Cedraz, has not yet commented on the process, but the Lula (PT) government decided to anticipate the warning from the court’s auditors that the rule remained in force even after the IRS itself pointed out problems and signs of administrative improbity.

A technical note from the internal audit of the Tax Authority, prepared on March 13 last year, showed that the act published under the Bolsonaro administration “possibly did not follow the procedure established in the internal rules”, as it was not substantiated with an explanation of reasons and calculations of impact.

“Therefore, the approval of the ADI [Ato Declaratório Interpretativo] can, in theory, represent a disciplinary infraction and a potential act of administrative improbity, by granting tax benefits without observing legal or regulatory formalities, depending on confirmation of elements such as fraud and damage to the treasury”, says the IRS audit note, reproduced in manifestation of the technical area of ​​the TCU obtained by Sheet.

“In view of this, the note recommends that the case be forwarded to the Internal Affairs Department of the Ministry of Finance for investigation into the responsibility of the signatory of the ADI, the then special secretary of the RFB, Julio Cesar Vieira Gomes”, he added.

Even so, the rule remained in force, guaranteeing tax protection for pastors for another ten months until its effectiveness was suspended in an executive act signed by the special secretary of the Federal Revenue, Robinson Barreirinhas. The suspension was published on Wednesday (17) in the Official Gazette of the Union.

The news was initially published by the Panel SA column

Behind the act published by the Bolsonaro government is the so-called prebend, remuneration received by pastors and religious leaders for services provided to churches.

Brazilian legislation exempts the prebend from collecting social security contributions, as long as it is related to religious activity and does not depend on the nature or amount of work.

In recent years, the IRS detected that some churches, mainly those led by evangelical groups, used the prebend to circumvent supervision and distribute a type of profit sharing to pastors who brought together the largest groups of faithful or the largest tithe collections.

The tax authorities imposed million-dollar fines and demanded payment of the social security tax rate of 20% on the amounts. The Bolsonaro government’s act contradicted the body’s internal understanding and not only made collection difficult, but paved the way for the cancellation of already established inspections.

After Lula took office, the act was considered by members of the tax authorities as “atypical”. However, behind the scenes there was a fear that his suspension would trigger a crisis with the evangelical group in Congress, at a time when the new government was trying to improve its relationship with the Legislature.

The parliamentary group acted as one of Bolsonaro’s support bases in Parliament and has been the target of attacks and gestures from the PT member in an attempt to reduce resistance to the current administration.

The maintenance of the act, however, caught the attention of auditors, who attached images from the Federal Revenue website to prove that it was still in force.

“Despite the act being recognized as vitiated, it continues to be in force, producing effects in the legal world. From the above, it is clear that periculum in mora [risco de que a demora em agir cause dano grave] which could cause harm to the public treasury and public interest and compromise the effectiveness of the decision on the merits that may be handed down by the court”, says the TCU document.

A first request for injunction was denied by Cedraz in February 2023, as the rapporteur considered it necessary to first hear the Federal Revenue’s explanations about what happened. Based on the elements brought by the body itself, however, the technical area understood it was necessary to suspend the effects of the act.

The auditors also suggested that the court question the Federal Revenue Service about the reasons why the agency’s interpretative act under Bolsonaro, even though it was considered invalid, was not annulled or validated.

The technical area also recommends taking measures to determine possible damage to the treasury caused by the rule’s validity, as well as procedures for possible “holding those who caused the damage responsible.”

The then secretary Vieira Gomes had direct dialogue with Bolsonaro and also became the target of investigations due to the former president’s attempt to recover jewelry presented by Saudi Arabia. Wanted by Sheet, he denied any irregularities. “All legal and regulatory standards pertinent to the issuing of the administrative act in question were observed,” he stated.

Although there was no formal decision from the court of accounts, the Revenue informed in a note that the suspension “complies with the TCU’s determination”. Elsewhere, the agency states that the decision complies with a “determination proposed by the Public Prosecutor’s Office before the TCU”.

The report questioned the agency about the measures to estimate the loss resulting from the standard, but received no response.

In a note published on Wednesday, the TCU’s communications department highlighted that the act that granted tax exemption to pastors is the subject of analysis in court proceedings, “no decision yet”. “The TCU manifests itself only through its rulings or through monocratic decisions by its ministers,” said the court.

According to the document from the TCU’s technical area, the Revenue informed that the values ​​of the launches targeting individuals with the main occupation “Priests and Members of Religious Orders and Sects” total R$ 293.8 million, the majority of which came from suspended liability (i.e., the agency cannot carry out the collection).

The report also does not clarify whether this value represents the entire potential loss of the Bolsonaro government’s act. At the time the standard was published, technicians estimated that the forgiveness could reach R$1 billion.

With the suspension of the act, the agency’s technicians warn that any credits in collection at the Federal Revenue that have been canceled based on the Bolsonaro government’s act cannot be restored.

In some cases, the principal amount of tax due may be subject to a new assessment, but interest and fines resulting from the passage of time since the first assessment will definitely be requested. Furthermore, this can only occur if the event giving rise to the charge occurred in the last five years — in longer periods, the IRS can no longer demand payment.

“After the cancellation of this act, the doubt arose as to whether the Revenue will be able to make new entries, especially in relation to old taxable events, such as those referring to the year 2016”, warns the president of Unafisco Nacional, Mauro Silva.