02/09/2024 – 12:08
BRASILIA (Reuters) – The Finance Ministry decided to include in the 2025 Budget the end of the payroll tax exemption for sectors of the economy and municipalities next year, arguing that a bill on the subject under analysis in Congress does not provide compensation for this tax waiver.
After the Supreme Federal Court (STF) demanded compensation, the government and Congress reached an agreement to gradually re-tax payroll taxes, providing for compensation for the benefit. The text that seals the agreement was approved by the Senate and awaits analysis by the Chamber of Deputies.
In a presentation distributed to journalists, the Treasury Department stated that the bill in the Legislature “only compensates for 2024, that is, the very short term, without defining compensation for the remaining years.” The cost of the program in 2025 is estimated at 18 billion reais.
“Ensuring the soundness of the Budget Bill (PLOA) 2025, we consider what is concrete: complying with the STF decision and reimposing a payroll tax,” the ministry stated in the document.
Despite not foreseeing the benefit in the 2025 accounts, the government included in the revenue estimates measures presented with the argument that they would be used to eventually compensate for the payroll tax relief if the Congress project did not generate sufficient sources of funding.
On this front, the ministry expects to raise R$14.9 billion by increasing the Social Contribution on Net Income (CSLL) and R$3 billion by adjusting the taxation of Interest on Equity (JCP). A bill with these measures was sent to Congress last week and will still be analyzed by lawmakers.
In an interview with the press, the executive secretary of the Ministry of Finance, Dario Durigan, said that the forecast for expenses with the tax relief has risen significantly in 2025, and could exceed 30 billion reais, compared to the initial forecast of 18 billion reais, and therefore, these measures alone would not be sufficient to fully offset the benefit.
The ministry also reported that the Budget foresees revenue of 58.8 billion reais in 2025 with a new tax transaction program and judgments from the Administrative Council of Tax Appeals (Carf), arguing that the forecast is conservative.
There is also an estimated revenue of 33.8 billion reais in dividends and shares.
According to the Treasury, if revenue shortfalls occur, two projects will be sent to Congress this year, with taxation of large technology companies and implementation of the global minimum taxation plan for multinationals, defended by the Organization for Economic Cooperation and Development (OECD).
On the spending side, the ministry expects savings of 20 billion reais in 2025 with new criteria for qualifying for tax benefits.
“The Brazilian population and us, the economic team, are bothered by unjustifiable loopholes that prevent taxpayers from paying their tax quota. This also harms fair competition,” he said.
In the budget, the government expects to close 2025 with a primary surplus of R$3.7 billion, according to budget data. On Friday, when the text was sent to the National Congress, the ministry had limited itself to saying that the text predicted that the zero primary deficit target for the year — which has a tolerance range — would be achieved.
According to Planning, the result will be obtained after deducting 44.1 billion reais in expenses with court orders and public calamity that are not accounted for in the target.
(By Bernardo Caram)
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