Municipalities submit an alternative proposal to Haddad regarding payroll reimbursement

Minister Fernando Haddad, of Finance, received on Wednesday (10) an alternative plan from the municipalities to increase the payroll of city halls from 8% to 20%. The proposal was presented by the president of the National Confederation of Municipalities (CNM), Paulo Ziulkoski.

The suggestion comes as a response to the initiative of the economic team, led by the bill proposed by the government leader in the Chamber, José Guimarães (PT-CE), which is the target of criticism by the municipal entity.

The CNM proposal seeks a gradual re-encumbrance, maintaining the social security contribution rate at 8% this year and increasing it to 15% over four years. Last year, Congress reduced this rate from 20% to 8% for municipalities with up to 156,200 inhabitants.

According to the CNM, this measure resulted in savings of R$2.4 billion in the first three months of this year, out of an estimated total of R$11 billion for 2024.

On the other hand, the Finance project, currently being processed in the Chamber, restricts this benefit to cities with up to 50 thousand inhabitants and net current revenue per capita up to R$3,895. The text provides for social security contribution rates of 14% this year, 16% in 2025, 18% in 2026 and 20% from 2017 onwards.

According to CNM calculations, the model proposed by the government would have a negative impact on municipalities of R$6.3 billion this year, in addition to generating losses of R$8.9 billion in 2025 and R$9.7 billion in 2026 The project, they say, would no longer benefit 2,900 city halls by establishing different rules based on net current revenue, as pointed out by the entity.

“The municipalist movement regrets that the project was presented without dialogue with the Municipalities and hopes that Parliament will listen to the voice and demands of the municipalist movement in the discussion of tax relief”, said Ziulkoski.

The president of the CNM highlighted that the government’s proposal would only be valid until 2026, and would not be permanent, which would mean a return to the 20% rate from 2027 onwards. The project is expected to be voted on next Tuesday (16) at Chamber.

In addition to the alternative suggestion, the CNM president also invited Haddad to participate in the mayors’ march to Brasília, which will take place between May 20th and 23rd.