Federation of Industries of the State of Paraná filed a statement on Monday (15 July); government and Congress are still debating how to compensate for the tax relief
A Fiep (Federation of Industries of the State of Paraná) filed a statement in the STF (Federal Supreme Court) on Monday (15.Jul.2024) to extend the suspension period for the re-imposition of payroll taxes on 17 sectors of the economy and municipalities with up to 156 thousand inhabitants.
Congress has until July 19 to approve the bill that is being processed in the Senate with an agreement on how to compensate for the tax relief, if the Supreme Court does not accept the request for an extension of the FIEP. However, even if it advances in the Senate, the resolution will have to wait until August, since the Chamber of Deputies has already gone into recess.
In the statement, Fiep suggests that the deadline be extended for another 60 days or, alternatively, that the Executive and Legislative Branches be notified to state their position on the need for this extension within 24 hours. Here is the full (PDF – 394 kB).
According to the federation, the “juridical insecurity” generated by a decision “imposed” will discourage investment, increase unemployment and may compromise the country’s economic recovery, “which is one of the agendas assumed by the federal government and of interest to the entire society“.
“The suggested extension of the deadline will allow the Executive Branch and the Legislative Branch to reach a consensus that minimizes these risks, promoting an environment of stability and trust”says the federation.
Since the Judiciary is in recess, the responsibility for responding to the demand falls to the Supreme Court’s on-call judge, in this case, Justice Edson Fachin. He is in charge of the Court’s on-call judges until this Tuesday (July 16), and the person who will take over immediately after, from July 17 to 31, is the president of the Supreme Court, Justice Roberto Barroso.
COMPENSATION
The agreement for the gradual re-taxation of payroll taxes in the 17 sectors of the economy and municipalities was signed in May between the government and Congress. The benefit is guaranteed in 2024, but the gradual return of the tax will begin in 2025 and continue until 2027.
The imbroglio is the source of resources to compensate for the tax relief. Congress does not accept any more tax increases and has discarded the government’s proposal to increase the CSLL (Social Contribution on Net Income) of banks by 1 pp (percentage point).
On the other hand, Planalto has not shown receptiveness to Congress’ proposals, as it considers the volume of resources that will be collected to be unpredictable.
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