Time frame and exemption are non-negotiable

In yet another war of nerves between the opposition and the government base, deputies and senators are mobilizing to overturn the vetoes of President Luiz Inácio Lula da Silva (PT) on matters approved by parliamentarians and vetoed by the head of the Executive, in the next session of the National Congress, scheduled for this Thursday (14). The opposition members articulate with the Centrão and guarantee: they will not admit negotiating either the time frame or the payroll tax relief.

These topics are considered a priority for deputies and senators, mainly from parties opposing the government, who consider the vetoes unfounded and worrying.

The vice-president of the Parliamentary Agricultural Front (FPA), deputy Evair de Melo (PP-ES), told People’s Gazette that “there is no type of agreement in Congress that allows Lula’s veto to the time frame to be maintained”. Lula vetoed parts of the project, which, after passing through the Chamber, went to the Senate and was approved a few days after the demarcation thesis was overturned by the Federal Supreme Court (STF).

The project that extended the payroll tax exemption for 17 sectors of the economy, such as industry and services, among others, was approved by the Senate in October, and allowed these sectors to be exempt or have reduced taxes and charges until December 2027 In this case, the President of the Republic decided to veto the text in its entirety, which caused dissatisfaction and criticism among the sectors affected by the veto and the political class.

President of the Parliamentary Entrepreneurship Front, deputy Joaquim Passarinho (PL-PA), is one of those leading the mobilization to overturn the veto. “We didn’t give up. There are two points that for us, there is no point in even talking about: time frame and payroll tax relief, there is no conversation, there is no agreement, there is no middle ground”.

Temporal Milestone: controversy over land demarcation has been going on since the beginning of the year

In the case of the time frame, for example, the controversy has been going on since the beginning of this year, when the Chamber of Deputies approved, in May, Bill 490/2007, which set the date of October 5, 1988 – date of promulgation of the Federal Constitution – as a deadline for the demarcation of indigenous lands in Brazil, anticipating the analysis of the topic by the STF plenary.

In September, the Court overturned the thesis and decided that the demarcation does not depend on the fact that indigenous communities were occupying or disputing the area on the date of promulgation of the 1988 Constitution.

Less than a week after the STF’s decision, in reaction to what they called ‘usurpation’ of Legislative powers, deputies and senators began an obstruction movement in Congress, paralyzing the activities of the House and Senate plenary sessions on the first day, with support from several parliamentary fronts, including Agriculture, one of the most influential in Parliament, and approved the time frame in the Federal Senate.

This text, sent for sanction by the president, had sections vetoed, including articles dealing with the obligation to compensate landowners in dispute; the need to compensate for improvements made in disputed areas; and the permission for non-indigenous people, who had possession of the demarcated area, to be able to use the land subject to demarcation until the demarcation procedure was completed and improvements were compensated; among other points.

The unease surrounding the vetoes has increased in recent days, with the statement by President Lula, during COP-28, in Dubai, who, when admitting the possibility of overturning the veto to the time frame, said that “we have to prepare to understand that either we build a democratic force capable of winning the Legislative power, the Executive power, and making the transformation you want, or we will see what happened with the Temporal Framework happen”.

“Wanting a fox to take care of our henhouse is believing too much. And we have to be aware of the role of politics that we have to play”, stated the PT member.

In response, the Parliamentary Agricultural Front (FPA) released a statement stating that Lula’s speeches criminalize the Legislature. The president of the bench, deputy Pedro Lupion (PP-PR), claims to have the necessary votes to overturn the veto.

Payroll exemption: Fronts launch manifesto in defense of extension

On another front, deputies and senators also expressed their position on the need to overturn President Lula’s veto on the extension of the payroll tax exemption for 17 sectors of the economy. Gathered together, 11 parliamentary fronts, such as Commerce and Services, Entrepreneurship, and Civil Construction, launched a manifesto for the overthrow.

The manifesto says that the exemption “has been fundamental for maintaining and generating jobs in key sectors of the economy, that maintaining jobs and stimulating economic activity also generates revenue through consumption and the collection of other taxes” and that “Overturning the veto is the best way to provide security and guarantee jobs.”

The president of the Entrepreneurship Front, Joaquim Passarinho, states that “this veto harms employment in Brazil and we will always defend the ever-increasing generation of jobs”. According to the deputy, the issue was discussed in Congress for months, and the government never saw any problems with the text, until it completely vetoed the approved project, promising that the Treasury would take charge of a new proposal.

This Monday (11), Minister Fernando Haddad (Finance) said that the alternative proposal, which remains a mystery, would be presented after the vote on the tax reform in the Chamber of Deputies.

The text vetoed by Lula, which was approved by both deputies and senators, extends the exemption, which expires on December 31st, until 2027, thus allowing companies that make up the 17 sectors benefited by the measure, and those that most employ in the country, replace the social security rate of 20% on salaries with a rate of 1% to 4.5% on gross revenue.

Impasse over vetoes has postponed Congress session since November

Since the beginning of November, leaders have been trying, unsuccessfully, to hold a joint session of the National Congress, which brings together deputies and senators, to analyze other presidential vetoes. After two postponements, the session should take place this Thursday, when 39 vetoes, partial and total, and another 20 bills from the National Congress (PLNs) must be analyzed – proposals that deal with budgetary matters under the exclusive initiative of the head of Executive related especially to the opening of supplementary and special credit in the Budget.

In addition to the vetoes to the time frame and the exemption from the payroll, Lula also vetoed sections of the fiscal framework and the project that reestablished the quality vote in the Fiscal Administrative Council (Carf), matters that are decisive for meeting the fiscal target, and prioritized in the first half of the year in the Chamber of Deputies, with personal commitment from the Minister of Finance, Fernando Haddad, and a lot of negotiation between parliamentarians and the government.

In the specific case of Carf, deputy Joaquim Passarinho recalls that when the agreement was reached to approve the matter, at the beginning of July, the government committed to paying the taxpayer’s debts in installments, in the event of a tie, in 12 installments, without interest or monetary correction, and then vetoed this part. For Passarinho, the government should try to reach an agreement to let the time frame pass, as approved, and in exchange, maintain Carf’s veto.

Lula also vetoed parts of the fiscal framework approved by parliamentarians that established “locks” so that the government could not eliminate expenses to balance its accounts. “It’s simple, you can’t take off the electricity bill to balance the household bills. And he vetoed it. That’s easy, social programs don’t count on the balance sheet, so it’s easy to balance my balance by taking out expenses, not saving”, adds the deputy.

The parliamentarian admits that it is possible to talk about these topics, but regarding the time frame and payroll tax relief “there is no conversation”. Lula’s vetoes will be overturned with the majority of votes from parliamentarians in each house – 257 deputies and 41 senators.