Payroll exemption: Senate votes extension until 2027 – 06/13/2023 – Market

The Senate can vote this Tuesday (13) on the CAE (Commission on Economic Affairs) a bill that extends until the end of 2027 the exemption from the payroll for companies in 17 sectors of the economy.

Approval would represent a defeat for Minister Fernando Haddad (Finance) in the Federal Senate, despite the good relationship built with parliamentarians.

The payroll exemption policy has already been extended several times and, in the current version, is valid until the end of this year. Postponing this deadline could embezzle public coffers by at least R$ 9 billion a year. There is also a risk that the project will reduce the social security contribution paid by municipalities with up to 142,600 inhabitants, increasing the impact on the accounts.

The proposal was presented by Senator Efraim Filho (União Brasil-PB), on the grounds that it is necessary to maintain jobs in the most labor-intensive sectors.

The party makes up the base of support for President Luiz Inácio Lula da Silva (PT) and has nominated three ministers, but has shown infidelity in some votes in the Legislative.

The payroll exemption project seeks to extend until December 31, 2027 the benefit that currently reaches 17 sectors of the economy.

The segments covered are footwear, call center, communication, apparel and clothing, civil construction, construction companies and infrastructure works, leather, vehicle and bodywork manufacturing, machinery and equipment, animal protein, textiles, information technology, communication technology , integrated circuit design, subway-railway passenger transport, collective road transport and road freight transport.

The bill’s rapporteur, senator Angelo Coronel (PSD-BA), added an article that reduces the contribution to the INSS (National Social Security Institute) paid by municipalities with up to 142,600 inhabitants, from the current 20% to 8%.

The parliamentarian’s argument is that the smaller city halls have little revenue of their own and receive smaller transfers from the FPM (Municipal Participation Fund), accumulating debts with Social Security.

Most of the small municipalities have their servants linked to the INSS, given the absence of their own Social Security regime (the so-called RPPS).

Senator Efraim Filho, author of the proposal that extends the exemption, says that the perspective for voting on the text is positive. “I believe that all the preliminary rites were fulfilled. The government’s resistance is natural”, says he, who chairs the Parliamentary Front for Commerce and Services.

According to Efraim, the measure is important to avoid layoffs in sectors that are labor intensive. The group estimates that the end of the policy would affect 600,000 workers, including layoffs and the absence of new hires.

“The government no longer has these revenues. having to pay costs”, says the senator.

The economic team is against extending the benefit, but admits behind the scenes the need to adopt a “damage containment” strategy, focused on overthrowing at least the device that reduces the charge on city halls.

In addition to the billionaire impact, its approval would create a disparity with municipalities that have their own RPPS and today pay rates even higher than 20% on the payroll.

According to interlocutors, parliamentarians are negotiating the possibility of leaving the prefectures’ election to a parallel bill, clearing the vote on the exemption for companies.

The Ministry of Finance is preparing a new rule to reorganize payroll exemptions in the country, and the government is trying to hold the vote on a Senate proposal that extends the current exemptions, in 17 sectors, until 2027, said this Monday ( 12) the leader of the government in the Senate, Jaques Wagner (PT-BA).

“The government is preparing something more comprehensive of changes in this issue of payroll, and Minister Fernando Haddad (Finance) intends to present this proposal in the second half”, said Jaques. “He would like us to wait on this proposal before voting on this extension.”

“What was meant to be provisional ends up becoming permanent, but improvised. What I’m going to argue in the CAE is that this proposal should be expected,” said the senator.

With Reuters