Minister of Social Security says the return of tax relief for city halls could have a ‘disastrous’ result

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For Carlos Lupi, the Senate president’s decision took everyone by surprise, was ‘wrong policy’ and could harm the quality of the service. The Minister of Social Security, Carlos Lupi, said this Tuesday (2) that the president of the Senate, Rodrigo Pacheco (PSD-MG), made a “wrong political” decision by overturning the measure that reburdened the payroll of around 3 thousand city halls. The measure was taken on Monday (1) by Pacheco. Minister of Social Security, Carlos Lupi, in an interview with TV Globo. Thiago Resende/TV Globo “I think it was a wrong policy. Because the social reach that Social Security has in serving the population is not being measured. If today I serve 39.5 million Brazilians with some type of benefit, every time If they flatten revenue, I’ll have a harder time paying them”, said Lupi in an interview with g1 and TV Globo. For Lupi, the measure could have a “disastrous” effect on Social Security accounts by encouraging city councils to adhere to the so-called general Social Security regime and impacting revenue collection. “When they see, notice that the rate they have to pay for Social Security will drop to 8%, everyone will leave their own regime and go to the general Social Security regime, to the INSS, because it will be cheaper. So look at the fall that this will affect Social Security. So we have to be very careful with any type of action that means a reduction in revenue in the largest social program in Brazil, which is Social Security. Surprise On Monday (1st), Pacheco let a excerpt from an MP (provisional measure), defended by the Ministry of Finance, and which provided that city halls would have to pay a 20% tax on civil servants’ payroll. Percentage above the current 8%, provided for by law. The economic team counted on the collection of taxes from city councils, at around R$ 10 billion. The Social Security Minister said that the measure — adopted on the day that the increase in collection would come into effect — surprised everyone, but that there is still room for adjustments. “It was something that fell upon us from one moment to the next. But nothing, as in politics and in life, exists that cannot be reformed, cannot be retreated, cannot be advanced in other ways, in other ways, less impactful for Social Security”, said Lupi. The minister defended that, instead of reducing rates, the government and Congress renegotiate the municipalities’ debts. According to him, this would avoid the increase in the Social Security hole that should follow Pacheco’s decision. The measure adopted by the president of the Senate has the support of congressmen, as the tax exemption for municipalities with up to 156 thousand inhabitants was included in the vote on a project last year — with an eye on the political impact of the measure in 2024, the election year . Without ‘affront’ Lupi defends dialogue with parliamentarians so that the government can find a way out of the impasse, which threatens the plans of the Minister of Finance, Fernando Haddad, to control the deficit in public accounts this year. This Tuesday morning, Haddad repeated the appeal he has been making for a “pact” between Powers to achieve goals. “The Executive is a power, but today the other two powers have a lot of protagonism when it comes to holding this meeting of accounts”, Haddad declared to journalists upon arriving at the ministry. Haddad and Pacheco Edilson Rodrigues/Agência Senado Later, the president of the Senate stated in a press conference that in his decision “there is no type of affront” and “no act of fiscal irresponsibility.” “I don’t want it to sound like criticism of the government. I already have my position on the issue of tax relief through a provisional measure, it was wrong from the beginning, it was clear from the first statements that it was wrong to use a provisional measure for this purpose”, stated Pacheco.

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