Minister of Finance states that the actions are ready; the government needs to refund R$26.3 billion in tax waivers for the benefit in 2024
The Minister of Finance, Fernando Haddadsaid this Tuesday (May 28, 2024) that the measures to compensate for the tax waiver of R$ 26.3 billion with the payroll tax relief for companies in 17 sectors of the economy and municipalities with up to 156.2 thousand inhabitants should be published on Friday (May 31).
“On Friday there should be a [medida] from the Treasury and the agreement must come from the hands of Senator Jaques Wagner. Compensation must come out of the hands of the Executive, as agreed in the Supreme Court [Tribunal Federal]”, he declared to journalists at the headquarters of his ministry, in Brasília, this Tuesday (May 28).
Jacques Wagner (PT-CE) is the leader of the Government in the Senate and the rapporteur of the project that determines the gradual end of payroll tax relief (understand below).
Haddad had said on Monday (May 27) that the compensation would only be delivered the following week. “We agreed to send it at the beginning of next week”he said.
IMPASES
Releasing a sector means that it will have a reduction or exemption from taxes. In practice, it makes hiring and maintaining employees cheaper in companies. Defenders of the mechanism say that this type of practice heats up the economy and promotes job creation.
The president’s government Luiz Inácio Lula da Silva (PT), however, wants to end the benefit. The more tax waivers, the lower the tax revenue. Haddad wants to balance public accounts and close the gap in 2024.
In its eagerness to gain momentum to negotiate the end of the benefit with Congress, the federal government asked the Court to consider the waiver of the payroll unconstitutional.
Minister Cristiano Zanin, appointed by Lula, issued an injunction that suspended the benefit.
After Zanin’s provisional decision, the government reached an agreement with Congress. The exemption for sectors is fully valid in 2024, but will gradually end in the following years until 2028.
O STF gave 60 days to approve measures to compensate for losses from the tax exemption. Only then can the agreement with Congress be achieved. If the deadline is not met, the tax benefit ends.
In the case of municipalities, the benefit continues to be valid until 2024. In the following years, a solution to the impasse has not yet been found.
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