If the Court validates the minister’s decision, the injunction will take effect until the bill that promotes reburdening in a phased manner is sanctioned
The STF (Supreme Federal Court) began this Friday (May 24, 2024) the trial of Minister Cristiano Zanin’s decision that suspended for 60 days the effect of the injunction signed by himself that suspended the exemption from company payrolls of 17 sectors of the economy and municipalities with up to 156.2 thousand inhabitants.
The analysis began in the Court’s virtual plenary session at midnight and will continue until June 4 if no minister submits a request for review (more time for analysis) or highlighting (to take the case to the physical plenary). In this modality, ministers cast their votes in the electronic system and there is no discussion.
Zanin’s decision is now valid. If it is validated by the other ministers, it will be in effect for 60 days, a period granted to the Legislative and Executive branches to sanction the bill presented by the senator Efraim Filho (União Brasil-PB), which promotes re-encumbrance in a phased manner.
Until the publication of this report (00:01), only the rapporteur presented his vote. He defended the referendum of his preliminary decision that meets the new request made by the government of Luiz Inácio Lula da Silva (PT).
The rapporteur argued that “the search for a dialogued solution favors the realization of the democratic principle, allowing different actors to participate in the decision-making process, with valuable contributions to constitutional jurisdiction” and that the “joint effort between the Powers of the Republic contributes to ensuring the sustainability of public accounts”.
“In effect, conciliation in constitutional jurisdiction has been honored by the Federal Supreme Court, with important precedents that demonstrate the relevance of enabling republican and constructive dialogue, even during the processing of constitutionality control actions”, he wrote. Here’s the complete of Zanin’s vote (PDF – 87 kB).
On May 15, the AGU (Advocacia Geral da União) sent a request to the Court to suspend the effect of the injunction (provisional) that determined the end of the payroll tax exemption.
The decision suspends the effects of the injunction granted on April 25, which has not yet been analyzed by the Court. On April 26, Minister Luiz Fux requested a review and postponed the trial. There were 5 votes to suspend the validity of the law that extended the payroll tax exemption.
If the Court endorses the rapporteur’s new understanding, the agreement made between Planalto and Congress will be valid – which will then be made official when the bill is approved. According to the agreement, in 2024, the exemption remains valid for the 17 sectors of the economy. In 2025, a rate of 5% begins to be applied. This percentage rises to 10% in 2026, goes to 15% in 2027 and reaches 20% in 2028.
Exemption Documents
- 14.dec.2023 – Congress overturns Lula’s veto and exemption is maintained until 2027 in law 14,784/2023. Here’s the complete of the law (PDF – 208 kB);
- April 24, 2024 – Lula asks the STF to consider the payroll tax exemption unconstitutional. Here’s the complete of the request (PDF – 195 kB);
- April 24, 2024 – Zanin suspends payroll tax relief at the government’s request. Here’s the complete of the decision (PDF – 294 kB);
- May 15, 2024 – Lula goes back and asks the STF to maintain payroll tax relief. Here’s the complete of the request (PDF – 177 kB);
- May 16, 2024 – Zanin gives deadline for Congress and PGR to comment on exemption Zanin asks for a demonstration. Here’s the complete of the order (PDF – 1.4MB);
- May 17, 2024 – In response to the STF, Congress endorses the AGU’s request for exemption. Here’s the complete of the demonstration (PDF – 1 MB);
- May 17, 2024 – Zanin maintains exemption for 60 days after government request. Here’s the complete of the decision (PDF – 19 kB).
Understand
The Minister of General Advocacy of the Union, Jorge Messias, sent a request to the Court to suspend the effect of the injunction (provisional) that determined the end of the payroll tax exemption for companies in 17 sectors of the economy and municipalities with up to 156, 2 thousand inhabitants.
O order (PDF – 177 kB) was addressed to minister Cristiano Zanin, author of the decision that forced companies to pay the INSS on May 20th (next Monday) 20% of the April payroll.
The president Luiz Inácio Lula da Silva (PT) revealed in a recent speech that the government had gone to the Supreme Court with this request just to force negotiation with Congress and the affected sectors. The political agreement came out on May 9th.
The government’s main argument presented in ADI (Direct Action of Unconstitutionality) 7,633 is that the measure was approved without specifying the source of resources in the Budget to grant exemption from payments. The question was accepted by Cristiano Zanin in the injunction that put an end to the exemption.
The problem is that the bill that is about to be analyzed by the Senate (and, later, by the Chamber) neither explains nor determines where the money will come from to pay for the exemption granted to companies benefiting from the exemption.
In his request to suspend the injunction, Minister Jorge Messias does not go into this detail. The issue is also not addressed in the injunction granted by Zanin on May 17. The minister mentioned the negotiations between the Executive and Legislative branches and said that he understands it to be “appropriate” grant the period of suspension agreed between the Powers.
According to Zanin, even though the analysis of the topic is the responsibility of the Supreme Court through the concentrated control action presented by the AGU, “It cannot be forgotten that constitutional jurisdiction currently allows greater participation of the parties in the search for a negotiated solution”.
“The search for a dialogued solution favors the realization of the democratic principle, allowing different actors to participate in the decision-making process, with valuable contributions to constitutional jurisdiction. In the same sense, the joint effort between the Powers of the Republic contributes to ensuring the sustainability of public accounts, in the wake of the valuable initiatives of the National Congress when approving the Fiscal Responsibility Law”, says an excerpt from the decision. Here’s the complete (PDF – 138 kB).
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