Senate commission concludes approval of payroll exemption until 2027 – 06/20/2023 – Market

The CAE (Economic Affairs Commission) of the Senate approved this Tuesday (20), in a supplementary vote, the bill that extends until the end of 2027 the payroll exemption for companies from 17 sectors of the economy.

As the decision was final in nature, there is no need for consideration by the Senate plenary and the text can go to the Chamber of Deputies. However, the project can be analyzed by the plenary if an appeal with this objective is presented by nine senators within five working days after the vote in the committee.

The project had already been approved by the committee last Tuesday (13), but it went through a new round of voting because the rapporteur, Senator Angelo Coronel (PSD-BA), substantially changed the content of the original proposal. In the new deliberation, the changes suggested by Senator Magno Malta (PL-ES) were rejected.

The decision represents a setback for the Ministry of Finance, which preferred a discussion linked to tax reform. The folder is commanded by Fernando Haddad.

Payroll exemption began during the Dilma Rousseff (PT) government, in 2011, and had successive extensions. The measure allows exempt sectors to pay rates of 1% to 4.5% on gross revenue, instead of 20% on payroll for Social Security and other contributions.

To compensate for the extension of the exemption, the project also extends, for the same period, the 1% increase in the Cofins-Importation rate – by current law it only goes until December.

The 17 segments contemplated by the payroll exemption project are footwear, call center, communication, apparel and clothing, civil construction, construction companies and infrastructure works, leather, manufacture of vehicles and bodies, 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 approved project also provides for the reduction of the social security contribution paid by municipalities with up to 142,600 inhabitants, from the current 20% to 8%.

Senator Angelo Coronel’s argument is that smaller city halls have little of their own revenue and receive smaller transfers from the FPM (Municipal Participation Fund), accumulating debts with Social Security. According to Coronel, the measure could benefit 3,000 municipalities, which account for 40% of the Brazilian population.

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).

As Folha showed, in assessing the economic portfolio, in addition to the billionaire impact, the approval of the article creates a disparity with municipalities that have their own RPPS and today pay rates even higher than 20% on the payroll.