Haddad says there is no way to invest R$17 billion per year in Perse; understand the impasse

The Minister of Finance, Fernando Haddad, stated yesterday, the 7th, that the government is unable to invest R$ 17 billion per year in the Emergency Program for the Resumption of the Events Sector (Perse). The former mayor also pointed out that the department investigates suspected irregularities in the program.

+Author of Perse says that, if irregularities are proven, there must be punishment without paralyzing the program

“The country does not have R$17 billion per year to invest in a program of this nature. Nor was this the objective of the National Congress itself. [O objetivo] was to provide a benefit of around R$4 billion per year. So, now there are two ways. First, investigate what happened last year and second, put order in the program”, said the minister in an interview with journalists as he left the ministry.

According to the ministry, the program cost R$17 billion in public accounts in exemptions in 2023, against an initial estimate of R$4 billion in tax exemptions.

Perse was implemented during the Covid19 pandemic as a way to mitigate the negative effects of the health crisis on the events and tourism sector. Among the benefits is the reduction to zero in the rates of a series of taxes for companies in the mentioned sectors. Last year, Congress extended the program until 2026.

The Federal Government introduced the gradual end of the program until 2025 in the same provisional measure issued at the end of last year after the veto of the President of the Republic, Luiz Inácio Lula da Silva, on the extension of the payroll tax exemption was overturned by Congress . Still, the MP has represented yet another point of friction between the Executive and the Legislative.

Haddad says that, at the moment, there is an investigation into possible irregularities in the use of the program by the Federal Revenue Service. The final report, however, depends on the end of a strike by the agency's tax auditors.

The expectation is that the work of the Tax Authority will be normalized after the government presented a proposal for the payment of the productivity bonus for tax auditors.

The minister also states that the investigation is not a “witch hunt”, but rather to show the current dimension of the program and why it is unsustainable for public finances.

Possible irregularities in Perse

Last Wednesday, the 7th, Haddad also commented that the Federal Revenue Service routinely takes data from large tax waiver programs, such as Perse, so that the intelligence area can investigate irregularities and, according to him, there are signs that this occurred.

The minister said that the ongoing investigation involves companies that used the National Classification of Economic Activities (Cnae) to receive the benefit, but were not in the events sector.

“What we want, at the end of the day, is to provide transparency so that Congress can make a well-informed decision about what is happening. The objective was to provide a benefit of around R$4 billion per year. This is even documented,” he reported.

Minister cancels agendas with Perse author

The author of Perse in Congress, Felipe Carreras (PSB-PE), said yesterday, the 7th, that the Minister of Finance, Fernando Haddad, canceled two agendas with parliamentarians and sector representatives to discuss the content of the provisional measure that extinguishes the program. The parliamentarian also disagreed with the suggestion made by the economic team that the proposal on Perse continue to be processed in Congress via MP, while the re-encumbrance of the payroll would be debated by bill.

“We tried to schedule an agenda with Haddad and unfortunately it was canceled (…) If (the program) has to be built, it will also be through dialogue,” said Carreras, adding that the meeting has not yet been rescheduled.

He once again demanded that the Treasury disclose data on the consumption of tax benefits offered by the program. Haddad has said that Perse's tax waiver has already amounted to around R$17 billion, close to the total tax expenditure of R$25 billion estimated for the five years of the policy. The benefited sectors, however, deny this information and ask for clarification.

Last Wednesday, after meeting with the president of the Senate, Rodrigo Pacheco (PSD-MG), and leaders of the House, Haddad said that the idea that will be taken to President Luiz Inácio Lula da Silva is to send a bill with constitutional urgency to deal with the payroll tax relief policy, while the gradual end of Perse and the limitation to credit compensation obtained by court decision would continue to be processed in Congress through the MP published last year.

Carreras, however, said that the idea was not well received by parliamentarians and the sectors.

“We find discrimination with the sector, with Perse, because, in the same way that Congress overturned the presidential veto of the tax exemption, we also overturned the veto on Perse. We won’t accept it and we’re going to vote,” he commented.

Entities from the tourism and event sectors met in Brasília in an act to defend the maintenance of Perse. The representatives released a manifesto to highlight the importance of the sectors for the country's economy. The document was signed by 305 parliamentarians.