Plan for Shopee increases clash between Haddad and PT – 04/13/2023 – Market

Amid clashes over the fiscal framework, the PT is already preparing a new offensive against other proposals being prepared by Minister Fernando Haddad (Finance).

Despite not giving details, members of the economic team announced at least two new measures, which affect minimum spending on health and education and taxes on imported products.

For members of the PT leadership, these ideas affect the political base of the party.

On one front, the government wants to put an end to the import tax exemption for orders of up to US$ 50 (about R$ 250) sent by individuals and destined for individuals. This will also, in practice, affect purchases made at Asian retailers such as AliExpress, Shein and Shopee.

Members of the economic team have also said that the government intends to change the Constitution to change the correction model for the minimum amount of spending on health and education.

PT members were uncomfortable with both ideas and intend to demand that new initiatives be proposed that target more favored classes, not the lowest.

A PT leader ironizes that Haddad was already treated as the most toucan of the PT, but that now, he is demonstrating the liberal potential.

In addition, PT members point out that Lula’s victory in the streets was narrow, which in the party’s assessment does not leave room for a set of unpopular actions in the fiscal and economic area.

Concerned about the negative repercussions, the government acted this Wednesday (12) to contain the wear and tear caused by the announcement of the end of the import tax exemption for orders of up to US$ 50 between individuals.

Planalto mobilized influencers with a strategy to explain the measure, whose objective is to raise up to BRL 8 billion closing the siege to international retail platforms. The measure, to end the exemption for the importation of orders worth up to US$ 50 between individuals, was announced in an interview by the special secretary of the Federal Revenue, Robinson Barreirinhas, to UOL.

Leaders of Lula’s party argue that the taxation mainly affects members of the middle and lower classes. On social networks, the Lula government has been mocked for not proposing the taxation of large fortunes, as mentioned in the election campaign, and, instead, creating a charge for purchases of international products.

International retail platforms, such as the Asian AliExpress, Shein and Shopee, have captured a significant part of the Brazilian market with cheaper products and are accused of unfair competition by Brazilian companies.

The Ministry of Finance says that the exemption, which is in effect for these remittances, has been used for fraud by e-commerce companies that improperly place the name of individuals as senders.

Therefore, according to Haddad’s proposal, there will no longer be a distinction in the treatment of shipments by legal entities and individuals, which would result in the collection of import tax in all cases. The timing in which the proposal was made public was also criticized by PT members for coinciding with Lula’s trip to China.

The PT already intends to call the Minister of Finance to explain the project for a new fiscal framework. Questioning Haddad about the other measures is not ruled out.

This Monday (10), the president of the PT, Gleisi Hoffmann (PR), made reservations about the proposal for a fiscal rule presented by the minister to replace the spending ceiling.

There is also a strong rejection, within the party, of Haddad’s commitment to zero out the deficit in public accounts in 2024. For members of the party, this puts pressure on the government to cut spending if there is no confirmation of expected revenues – one of the main points presented by the Ministry of Finance is the increase in revenue to control public accounts.

Regarding health and education floors, the PT’s fear for the change in the minimum correction rule is that, in practice, the amounts allocated to these areas will be reduced. This measure has a negative impact on PT bases, including public servants in these areas.

According to the Constitution, the health and education floors are corrected by a percentage of revenue. In the case of health, 15% of the so-called RCL (net current revenue, which represents federal revenue deducted from constitutional and legal transfers made to states and municipalities, in addition to some contributions). In education, the floor is 18% of revenue net of taxes.

The constitutional floors, which were in force before the approval of the spending cap in the Michel Temer government and will be applied again, are considered essential by PT members to guarantee increases in the amounts applied in these areas.

PT members already say that there is no willingness to vote on a proposal, even if presented by Haddad, that reduces or makes the floors too flexible.

In one wing of the party, the idea is to avoid open criticism at this time, but the party leadership will soon position itself against the proposal.

The secretary general of the acronym, Henrique Fontana, says that the constitutional floors are sacred and that Haddad never mentioned in the conversations that he had plans to change them.

“I’m sure we’re not going to mess with that [nos pisos constitucionais]. Every time I talked to Haddad about the policy he is conducting, he did not mention this hypothesis”, says Fontana.