Guedes returns to criticizing payroll taxes as a way to fund CNI

On Tuesday (7), minister Paulo Guedes (Economy) criticized the form of financing for the so-called Sistema S, a group of institutions managed by business entities. They receive funds collected by the Federal Revenue on the companies’ payroll.

“I want to leave a reflection for the CNI [Confederação Nacional da Indústria]. It does a wonderful job, but the form of financing is wrong,” he stated at an event held by the CNI itself – which administers Sesi (Industry Social Service) and Senai (National Service for Industrial Learning).

The Sistema S entities, which usually also offer learning initiatives, are supported by contributions from companies that focus on the payroll – a type of charge Guedes calls a weapon of mass job destruction.

“It cannot be imposed on payroll, which is a weapon of mass destruction of jobs. If we don’t tell the truth to each other, we won’t be successful. We will only be successful if we tell the truth to each other,” he said on stage, which also had the presence of the president of the CNI, Robson Andrade (who applauded the speech amidst the applause of the audience).

“The truth is that this financing is wrong. It destroys jobs. The worker, to earn R$1,000, costs R$2,000 for the company. It is unacceptable,” he said.

Despite this, the minister said that the learning work done by Sistema S is brilliant, and that the point is the need to change the form of financing.

Guedes’ speeches recall when the minister stated that it was necessary to “thread the knife” into Sistema S. This occurred in December 2018, before he took office, but the plan did not go forward.

This year, the government created an MP (Provisional Measure) to use resources from Sistema S to finance a new program aimed at professional training for needy youth. Half would be paid by Sistema S and the other half by the company the individual works for.

But the entities’ directors resist the change and the proposal fell through Congress.

In September, the Economic Policy secretary at the Ministry of Economy, Adolfo Sachsida, made a similar comment and defended “passing the knife” in the S System with the objective of obtaining resources for the payment of scholarships for the qualification of needy young people.