Pacheco demands that the Lula government exempt municipal payroll taxes

The issue of reimbursing the payroll continues to generate an impasse between the federal government and the National Congress, despite the repeal of the section of the Provisional Measure, which dealt with the gradual reimbursement of the payroll of 17 sectors of the economy.

The president of the Senate, Rodrigo Pacheco, stated this Wednesday (28) that the impasse remains in relation to the tax exemption for municipalities, which was maintained in MP 1,202. He highlighted that conversations with the government must continue to extend the solution to city hall payrolls. A new meeting must be scheduled with the Minister of Finance, Fernando Haddad, as soon as he returns to Brasília.

“Although I recognize and praise the federal government’s intention regarding the 17 sectors, it is a partial solution, […] because it does not equate what is in the same political and legal condition, which is the exemption from municipalities’ payroll and which needs to be done by bill”, said Pacheco in the Senate session.

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. These sectors employ more than 9 million people.

The revocation was possible after a round of government negotiations, with the participation of the president of the Senate and leaders. The matter will be debated in a bill to be sent soon by the government to Congress.

Pacheco reinforced that the government’s decision not to withdraw the reimbursement from municipalities harms city halls. “If on our part there was an understanding of the unconstitutionality of linking matters that were typical of a bill to a provisional measure, as we had decided, this also applies to the exemption from the municipalities’ payroll. Therefore, the ideal solution is effectively forwarding the revocation of the provisional measure [1202] in the part that deals with tax relief on the payroll as a whole”, demanded Pacheco.

Pacheco’s speech was to reassure the mayors and make it clear that they can trust Congress, which will give priority to the issue.

Confederation of Municipalities marks act against government measure

In response to the government’s decision not to withdraw the re-encumbrance of MP municipalities, the National Confederation of Municipalities (CNM) decided to schedule a Municipal Mobilization on March 6, in Brasília, to demand a reduction in the INSS rate.

According to the entity, the Lula government’s measure represents a “scenario of total disrespect for Municipalities and discredit to Congress’ decisions.” The Confederation also reinforces that Law 14,784/2023 was “an important achievement for the Municipalities and would represent savings of R$11 billion per year if it were fully implemented”.

“At this moment, I want to urge everyone to stay united. Let’s go to Congress. The majority of deputies and senators already helped us when we overturned the veto. We have to work with Congress, which has been our ally on this issue. What the Executive is doing is exactly changing a sovereign decision of Congress. To this end, we will mobilize and we will remain in this position to maintain our achievement”, said the president of the National Confederation of Municipalities (CNM), Paulo Ziulkoski.