CAE President asks the government for data on payroll tax relief

The president of the CAE (Economic Affairs Committee) of the Senate, Vanderlan Cardoso (PSD-MG), requested this Friday (19.Jan.2024) from 3 ministries data on the results of the payroll tax relief policy. The measure began to be adopted in the country in 2011, during the government of the former president Dilma Rousseff (PT).

The congressman sent the requests to the following ministries: Finance (here is the full text – PDF – 87 kB), from Labor (PDF – 89 kB) and Development, Industry, Commerce and Services (PDF – 88 kB).

Here is what Vanderlan asked the ministries:

• Request for the results of the tax exemption policy, specifically regarding the annual number of jobs created by the benefited sectors, and which indicators were used for such measurement.

The request comes after a sequence of disagreements in the numbers presented by the Treasury regarding payroll tax relief. In the latest data released, the ministry informed that only the resignation with the exemption from the payroll of 17 sectors will cost R$ 12.26 billion to the federal government in 2024.

The values ​​are in accordance with data reported by the Minister of Finance, Fernando Haddad, on Tuesday (16 January). First, there was talk of R$18.4 billion. Then, at the end of December, without explaining, Haddad mentioned the figure of R$25 billion. Now, it has been reduced to R$16 billion, with R$12 billion for exemption and R$4 billion for a reduction in social security contributions.

This Friday (January 19), the president of the Senate, Rodrigo Pacheco (PSD-MG), stated that the section of MP (provisional measure) 1,202 of 2023, which deals with payroll repayment, will be reissued by the federal government.

According to Pacheco, the agreement was reached in conversations with the Finance Minister and the President Luiz Inácio Lula da Silva (PT).

The measure was enacted at the end of 2023 and caused a negative reaction in Congress. Senate leaders advocated that Pacheco return the MP to the government.

Haddad did not confirm the agreement to reissue the reinstatement MP. The minister stated that there will be a meeting with Lira, Pacheco and leaders before the end of the parliamentary recess, in February. The meeting is expected to be held in the week of January 29th, the last week before work resumes in Congress.

MP for exemption

At the end of 2023, Congress overturned the presidential veto on the project that would end the tax benefit for 17 sectors of the economy on December 31st. In this way, the exemption would be extended until 2027. At the end of the same month, however, the Minister of Finance published the provisional measure 1,202 of 2023which deals with the re-encumbrance of sectors from April 2024.

• MP 1,202 2023 – deals with the re-encumbrance of 17 sectors of the economy, limits the compensation of tax credits obtained by companies through a court decision and extinguishes until 2025 the tax benefits granted to event promotion companies via Perse. It was published on December 29, 2023. It expires on April 1, 2024. Read the complete of the text (PDF – 100 kB).

The government negotiates with Congress alternatives to increase tax collection.

The exemption covers 17 segments of the Brazilian economy. The list is varied and includes sectors such as footwear, textile industry, communications, information technology, road transport, call center and civil construction.

Here is the infographic with the benefited sectors: