“Perse needs to come to an end,” says Treasury Secretary

The Secretary of the National Treasury, Rogério Ceron, said this Thursday (1st.Feb.2024) that the Persian (Emergency Events Sector Resumption Program) “there needs to be a real end”.

The gradual extinction of the initiative was defined in the MP (provisional measure) 1,202/2023, which deals with the re-encumbrance of payroll in 17 sectors of the economy and also lowers other standards to increase tax collection.

Here is what Ceron said in an interview with Poder360:

“He [Perse] it was an emergency situation program, and the word emergency has the meaning of having plurality. A situation that demands specific and time-determined support. It really needs to come to an end.”

Ceron stated that the program had a much greater fiscal impact than expected at its creation, through law 14,148/2021. “When it was created, the expectation was that it would have an impact of R$4 billion [por ano]. There was a decision by Congress to support this aid, given that it had an impact of R$4 billion. Last year, it was R$17 billion”he declared.

The secretary also said there was “drawing problems” of the program because of the cost. “Obviously, it cannot be perpetuated. There is no point in its construction being perpetuated”he declared.

Watch (45min10s):

Perse was established seeking to ensure emergency and temporary measures for the events sector during the covid pandemic. Companies in the sector were at a standstill during the health crisis due to long periods in which gatherings were prohibited. Aid to the sector comes from debt renegotiation, compensation and tax exemptions.

The Minister of Finance, Fernando Haddadsaid that the estimated fiscal impact in 2024 will be R$16 billion, if the program is maintained in full.

Here is the content of the measure instituted by the Lula government:

• MP 1,202 of 2023 – in addition to dealing with the re-encumbrance of 17 sectors of the economy, it 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).

About tax credits

The provisional measure defines that companies that have obtained tax credits exceeding R$10 million in court will not be able to deduct this full amount in a single year. The 1st declaration of compensation must be presented within a period of up to 5 years, counting from the date of the decision becoming final or the approval of the withdrawal of the execution of the judicial title.

Ceron stated that the Treasury is still regulating the process and that the measure is positive because it ensures “predictability” to the Budget. “Today, there is a situation that causes unpredictability because a taxpayer happens to arrive in December and, suddenly, he compensates an amount worth billions that no one knew about, no one expected. This causes a huge inconvenience from a fiscal management point of view.”he said.

The secretary reinforced that amounts above R$10 million could be offset in the following financial year. Another possibility is that the remaining portion will be converted into court orders – Executive debts for which there is no longer any recourse.

“We paid in July and paid at the beginning of the following year. He [o beneficiário] will receive these resources within 12 months”he said.

On December 28, the special secretary of the Federal Revenue, Robinson Barreirinhas, stated that the estimated impact is around R$20 billion in 2024. This is the amount that companies will no longer offset in tax credits from court decisions this year. year with the limit imposed by the government.

Ceron also declared that there is no decision on reviewing the partial payroll tax on 17 sectors of the economy and the reduction of the social security rate from 20% to 8% for municipalities with up to 142.6 thousand inhabitants. For these measures, the estimated cost is R$16 billion.

“It is not clear whether or not changes will occur and, eventually, in the case of any changes, how it will be compensated”, he declared. The secretary spoke in “dialogue” with Congress and the sectors involved.