“Tax adjustment cannot be made on top of the worker”, says Haddad

The Minister of Finance, Fernando Haddad, said this Wednesday (26) that the fiscal adjustment cannot be made on top of the worker. He commented on the judgment of the Superior Court of Justice (STJ) on tax incentives that allow companies to deduct benefits granted to states from the payment of federal taxes.

“We are very confident and we are confident that we have the correct thesis. The fiscal adjustment needs to be done, but this time, it cannot be done on top of the worker. Whenever there is a fiscal adjustment, who pays is who earns the minimum wage, who pays is who is unemployed, is the beneficiary of Bolsa Família, who pays is SUS [Sistema Único de Saúde]. We are doing the right thing, making those who do not pay taxes pay”, said the minister.

Late this afternoon, the STJ formed a majority in favor of the government, in a victory that could boost revenues by up to R$90 billion, reported Agência Brasil. The judgment, however, depends on a decision by the Federal Supreme Court (STF), after Minister André Mendonça, from the Supreme Court, granted an injunction that will cause the case to be tried again.

The government has a favorable decision on the issue to boost revenues by up to R$90 billion and meet the fiscal targets proposed in the project for the new fiscal framework. According to the text sent to Congress last week, the government intends to zero the primary deficit (result of government accounts without public debt interest) in 2024.

According to Haddad, the charge is socially fair because it affects large companies that used the tax incentive to pay less tax. The minister criticized businessmen who took advantage of an interpretation of legislation that granted tax incentives to states to stop paying taxes.

“If people are evading taxes, because there’s no other expression, they have to pay something they’ve always paid their whole lives, the Social Contribution, the Income Tax. Then they came up with this interpretation on top of a parliamentary amendment and opened this hole in the federal budget. Who is this hole in the Budget hurting? It is harming those who depend on public services, health, education,” he said.

Haddad avoided commenting on Mendonça’s injunction. He just said that, if necessary, the government will resort to all instances, including the STF, to reduce tax evasion. “We are very aware of what we are doing. The thesis is fair and we are confident. Obviously, the decision is made by the STJ, by the ministers of the Court, very respectfully. But the thesis is very correct, very good and we will defend it in all instances. There is still the STJ, then the STF. We are very safe,” he declared.

According to the minister, when the State does not charge those who do not pay taxes, society as a whole pays for the evader, through high inflation, high interest rates and unemployment. “Those who do not pay taxes will contribute to the fiscal adjustment, so that society as a whole benefits from less inflation, lower interest rates and better public services. It’s simple. The time has come for Brazil to meet with itself, to do what is necessary and safeguard the constitutional rights of those who most need the Brazilian State at this moment”, concluded Haddad.