System S: value for Embratur in MP may fall – 05/22/2023 – Market

The National Congress articulates reducing the amount to be received by Embratur (Brazilian Agency for International Tourism Promotion) to resolve the impasse with the S System around the MP (provisional measure) that creates incentives for the events sector.

Since passing through the Chamber of Deputies, the MP has provoked a tussle between the S System and the agency that takes care of promoting tourism, entrusted to the command of former deputy Marcelo Freixo, one of the main allies of the government in Rio de Janeiro.

According to the proposal endorsed by federal deputies, Embratur will be entitled to 5% of the resources collected by Sesc (Social Service of Commerce) and Senac (National Service of Commercial Learning) with the mandatory contributions collected from companies. The inclusion was made by the leader of the government of Luiz Inácio Lula da Silva (PT) in the Chamber, José Guimarães (PT-CE), rapporteur of the text.

Instead of the percentage, Congress evaluates the payment of a fixed amount to Embratur for a period that, according to the articulation in progress, would be four years. With the item defined, parliamentarians say that the amount allocated to the entity would revolve around R$ 300 million – less than the current impact of the percentage stipulated in the MP, of R$ 447 million (based on the R$ 8.9 billion raised by the two entities in 2021).

Furthermore, setting a deadline would oblige Embratur to seek an alternative source of funding to replace Sesc and Senac resources, evaluate the parliamentarians.

Edited by former president Jair Bolsonaro (PL) last year, the provisional measure needs to be approved by May 30 so as not to lose its validity. The text entered the agenda of Wednesday (24) of the Senate.

The report was handed over to Senator Daniella Ribeiro (PSD-PB), rapporteur for the proposal in 2021 that established Perse (Emergency Program for the Resumption of the Events Sector) —altered by the MP now under discussion.

In the session in which the MP was approved in the Chamber of Deputies, the leader of the Lula government defended Embratur’s “strategic importance” for publicizing Brazil and generating jobs and income.

“It’s just a percentage. To give you an idea, 5% of the R$ 8.9 billion in the Sesc-Senac system represents a value well below R$ 500 million”, said José Guimarães at the time.

Since then, the CNC (National Confederation of Commerce) has pressured senators to withdraw the provisions of the MP, on the grounds that the change could lead Sesc to close its activities in 101 municipalities and Senac, in 95.

The fight has also put the union centrals and the opposition to the Lula government in the Senate on the same side. Several entities such as the CUT (Central Única dos Trabalhadores) and Força Sindical released a note in which they affirm that the redirection of resources to Embratur is undue and unfair.

Different opposition senators, such as Rogério Marinho (PL-RN), leader of the group, Mecias de Jesus (Republicanos-RR), leader of the Republicans, and Jorge Seif (PL-SC), deputy leader of the PL, proposed that it be removed of the text of the MP the transfer of 5%.

Senators stated that it is necessary to find an alternative for Embratur that does not compromise the resources of the S System. Leaders also raised the possibility of reducing the percentage allocated to promoting tourism from 5% to 2%.

Senator Izalci Lucas (DF), leader of the PSDB, says that there are “several possibilities” under discussion to help Embratur, “except” that of the S System.

“The Supreme Court has already decided that the S System is private. It has to find another source of funds, a source that is not unconstitutional. It could be excess revenue, resources from the Ministry of Tourism itself, games [regulamentação de apostas esportivas]”, he states.

The leader of the PSB in the Senate, Jorge Kajuru (GO), one of the deputy leaders of the Lula government, assesses that part of the opposition wants to attack the government through Embratur. He claims that there is no plan B to guarantee the company’s budget.

“I accept plan B, as long as it is strong, has financial content, dignified structure, is viable in the four years of government and really exists. [Se não]is you losing almost half a billion reais to invest in something called tourism in Brazil”, he says.

Base leaders assess that, if there is no agreement, the tendency is for the transfer to be maintained by the rapporteur and decided in the vote. The bet is that, even with the eventual defeat of Embratur in the Senate, the tourism agency will win in the Chamber.

Freixo has made a pilgrimage to Senate offices with the help of federal deputy Felipe Carreras (PSB-PE), leader of the largest block in the Chamber. According to the president of Embratur, who has been telling interlocutors, the scenario is more or less tied – with around 35 senators in favor, 35 against and 10 undecided.

The company hired a study by FGV (Fundação Getulio Vargas), used to argue in Congress that the funds transferred to Embratur would return to the S System.

Freixo and his allies have said that, as the Bolsonaro government transformed Embratur into an autonomous social service agency, it could no longer be included in the Union Budget.

Thus, if it does not receive funds from the S System, it would not even have the cash to meet the payroll. The president is also betting on the mobilization of regional Embratur secretaries together with politicians from their respective states to sensitize them on the subject.