Lula’s veto on the exemption of 17 sectors could impact almost R$19 billion to public coffers

The overturn of President Luiz Inácio Lula da Silva’s (PT) veto of the bill that extends payroll tax relief for 17 sectors could impact public coffers by almost R$19 billion. According to “Folha de São Paulo”, in the Ministry of Finance’s accounts, the extension of the payroll tax exemption would generate an impact of R$9.4 billion annually. Reducing the rates that city halls pay to the INSS (National Social Security Institute) would drain another R$9 billion.

The president’s decision has been criticized both by entities from various sectors and by parliamentarians.

The Minister of Finance, Fernando Haddad, said he will present a proposal by the end of the year to replace the payroll tax exemption, but did not give details.

Behind the scenes, according to “Folha”, members of the government believe that it would have been more prudent if Haddad quickly announced the balancing measures for the affected sectors, to prevent too great pressure to overturn the veto, or even for it to end. impacting the progress of the economic agenda in the National Congress.

Payroll relief is a mechanism that allows companies in benefiting sectors to pay rates of 1% to 4.5% on gross revenue, instead of 20% on payroll.

The permission came into effect 12 years ago for some areas and currently covers 17 sectors. The project maintained the exemption until December 31, 2027.

Currently, the sectors covered by the exemption are: clothing and clothing, footwear, civil construction, call center, communication, construction companies and infrastructure works, leather, manufacturing of vehicles and bodies, machinery and equipment, animal protein, textiles, technology information, communication technology, integrated circuit design, metro-rail passenger transport, public road transport and road freight transport.

According to Folha, if the veto is overturned, the Executive can still call the Federal Supreme Court (STF) to question the law.

In other episodes involving resignations, previous governments also sought support from the Federal Audit Court (TCU) to avoid the implementation of exemptions without corresponding compensation measures.