Tax framework: how is the procedure in Congress – 04/19/2023 – Market

The bill for the new fiscal rule (measures to balance public accounts and contain the growth of public debt as a proportion of GDP) was delivered to representatives of Congress on Tuesday night (18), in a meeting attended by by President Luiz Inacio Lula da Silva.

Ministers Fernando Haddad (Finance), Geraldo Alckmin (Industry), Simone Tebet (Planning) and Rui Costa (Casa Civil) were also at the meeting, in addition to the Executive Secretary of Finance, Gabriel Galípolo, the President of the Chamber, Arthur Lira (PP-AL), and Senator Veneziano Vital do Rego (PSB-PB), vice-president of the House who represented Rodrigo Pacheco (PSD-MG).

After the meeting, Lira stated that the text can be approved by the next May 10th in the House and that the government’s difficulty in setting up the base of parliamentarians does not hinder its processing.

According to the deputy, although the text requires 257 votes to be approved, the deputies will seek the support of 308 parliamentarians – the same level required for constitutional changes. Lira also said that the rapporteur will be announced this Wednesday (19).

SEE THE ROUTE OF THE NEW TAX RULE IN THE CONGRESS

Where will the procedure begin?

As it is a supplementary bill forwarded by the Executive Branch, the text will begin to be discussed in the Chamber of Deputies. The House will have the final word on content, even if the Senate makes changes during consideration.

Where can the proposal for a fiscal rule go through the Chamber?

A complementary bill of law is usually forwarded for analysis by commissions specializing in topics covered by the proposal —called merit commissions. There are also the Finance and Taxation and Constitution and Justice committees, which can analyze the merits and/or admissibility of supplementary bills, that is, whether they are in accordance with budgetary rules and constitutional precepts. All must also pass through the plenary.

Can the project go to a special commission?

Projects dealing with matters relating to more than three merit committees are sent to a special committee, which replaces all others.

Can it be handled urgently?

The plenary may approve a request for the supplementary bill to be processed on an urgent basis. Generally, this depends on the leaders’ agreement. The President of the Republic may also request an urgent vote on a project of his own initiative. In this case, the proposal must be voted on within 45 days, or it will block the agenda of the Chamber of Deputies or the Senate (depending on where it is at the time).

How does the emergency system work?

A project under an urgent regime can be voted quickly in plenary, without the need to go through the committees. The rapporteurs of the proposal in the committees give their opinion during the plenary session. The text is read from the tribune, and there is the possibility of an immediate vote.

What does it take for the proposal to pass Congress?

Complementary bills require an absolute majority of favorable votes, that is, more than half of the members of each House. That means at least 257 votes in the House and 41 votes in the Senate.

What is the final course of the procedure?

A complementary bill sent by the Executive is considered first by the Chamber of Deputies. Then the text goes to the Senate. If there are no changes, the text goes to the presidential sanction.

However, if the senators make changes to the text, the project returns to the Chamber, which will have the final word — the deputies can accept the senators’ changes or restore the text originally approved by the Chamber. In this case, after the new vote, the text is sent to the President of the Republic for sanction.

The Chief Executive has 15 working days to sanction the project in its entirety or with partial vetoes in some devices, or even veto it entirely. All vetoes undergo further validation by Congress, which can overturn them with an absolute majority of deputies (257) and senators (41).