Lula revokes section of MP and maintains tax exemption for 17 sectors of the economy

President Luiz Inácio Lula da Silva (PT) signed this Tuesday (27) the revocation of the section of the provisional measure (MP) that reburdened the payroll of 17 sectors that employ the most in the economy. The reinstatement was being processed in Congress in MP 1,202 presented by the Executive at the end of last year. These sectors employ more than 9 million people.

The government will resume discussion of the topic via a bill, which will be sent urgently to parliamentarians. The decision was confirmed by the Minister of Institutional Relations, Alexandre Padilha, this evening. The Lula government decided to maintain in the MP the gradual end of the Emergency Program for the Resumption of the Events Sector (Perse), the reimbursement of payroll for municipalities and the limits on tax compensations.

“This will allow us to continue dealing, within the scope of the provisional measure, discussing and negotiating with the National Congress the points related to Perse… And also the issue of tax compensations”, stated Padilha in a video disseminated on social media. The minister highlighted that the government is “showing a willingness for dialogue, negotiation and efforts to recover public accounts”. According to Padilha, the economic team must present data on the proposals to Congress.

The re-encumbrance of the 17 sectors generated a crisis between parliamentarians and the government. Congress overturned Lula’s veto and validated the bill that extended the exemption until 2027. However, at the end of December, the federal government published MP 1202/2023 containing a set of actions to increase revenue, in an attempt to reach zero deficit in 2024. Among the measures was the gradual re-encumbrance of the payroll of 17 labor-intensive sectors.

A People’s Gazetteas a communications company, is among the sectors benefiting from the extension of the payroll tax exemption.