Pacheco says that the decision to exempt municipalities “does not affect” the relationship with the government

After revoking part of the provisional measure (MP) 1,202/2023 to maintain the payroll tax exemption for municipalities with up to 156 thousand inhabitants, the president of the Senate, Rodrigo Pacheco (PSD-MG), stated the decision “does not affect” their relationship with the Lula government. This Monday (1st), he extended the validity of the MP for another 60 days, but left the section that dealt with the reimbursement of the leaf to expire.

As a result, these municipalities will have to pay 8% of the payroll, instead of 20%, as initially determined by the Executive in the proposal. Pacheco’s initiative impacts the Minister of Finance’s goal, Fernando Haddad, to eliminate the deficit in public accounts this year.

“I would first like to make an important clarification of our good alignment with the federal government, especially with the Ministry of Finance. This does not affect the relationship we have established, which is very fruitful in 2023, with important approvals, including the tax reform All the Ministry of Finance’s projects were very well received and we approved them aware of their importance for the development of Brazil, for the balance of public accounts”, the president of the Senate told journalists this Tuesday (2).

“There is no type of affront, no act of fiscal irresponsibility,” he added. Earlier, the minister stated that he was not informed by Pacheco about the decision. Haddad reported that he spoke to the Minister of Institutional Relations, Alexandre Padilha, about the MP, but that this specific point regarding the municipalities was not addressed.

The senator highlighted that he had already informed Padilha about the decision. “I informed the minister responsible for political articulation, minister Alexandre Padilha, that we would have the decision not to extend the provisional measure, recognizing these unconstitutional provisions. And, obviously, I also told him that we are open to listening to the government’s new proposal regarding payroll tax relief via a bill”, he stated.

Asked about the government’s reaction to the decision, Pacheco said he had not seen any demonstrations and reinforced that the issue must be addressed through a bill, reported the Senate Agency. “I didn’t see the reaction from Palácio do Planalto, but there is no need for reaction or justification for this… I don’t want it to sound like criticism of the government. I already have my opinion about MP. It has been wrong from the beginning, it is It is wrong to use MP for this purpose”, he reinforced.

The president of the Senate did not rule out a change in the rules. “We are absolutely open to discussing a new model… If there are no votes to approve, we will look for sources of revenue to support the exemption for both the 17 sectors and the municipalities,” he said.