Senate extends payroll exemption for two years

​The plenary of the Senate approved this Thursday (9) a bill that extends the exemption from payroll for 17 sectors of the economy until December 2023.

The bill was symbolically approved by the senators. As it had already received the approval of the deputies, it goes straight to the sanction of President Jair Bolsonaro (PL) — who has also already manifested himself in favor of the proposal.

The payroll exemption for 17 sectors would expire on December 31st. For this reason, the business sector had been articulating and pressing the National Congress for the measure to be extended.

The initial proposal provided for an extension until the end of 2026. However, during the proceedings in the Chamber, deputies decided to reduce this period to the end of 2023.

This date is in line with that defended by Bolsonaro, who even announced the extension of the exemption for another two years.

The measure also initially faced resistance from the economic team, as it affects the collection of federal taxes.

The payroll tax exemption began in the government of former president Dilma Rousseff, under the argument of maintaining jobs.

In 2018, the benefit stopped benefiting 56 sectors to contemplate 17, until last year, when Bolsonaro extended the measure for another year.

Currently, the measure benefits call center companies, the computer industry, with development of systems, data processing and creation of electronic games, in addition to communication companies, companies that operate in collective road transport of passengers and civil construction companies and of infrastructure works.

The measure allows companies to contribute with a percentage that varies from 1% to 4.5% on gross sales, instead of 20% on employee compensation to Social Security (employer’s contribution).

This represents a decrease in the cost of hiring labor. On the other hand, it means less money for public coffers.

The economic team even informed that the exemption would result in an impact of R$ 8 billion per year. According to the IFI (Independent Fiscal Institution), this cost would be R$ 6 billion.

The exemption from the payroll was approved on November 17 by the Constitution and Justice Committee of the Chamber of Deputies. As its processing took place on a terminative basis, it did not need to be voted on by the House’s plenary and went straight to the Senate.

The president of the Senate, Rodrigo Pacheco (PSD-MG), then decided to speed up the processing of the proposal and decided to take it straight to the plenary. Pacheco also received this week a delegation of businessmen from the sectors benefited by the measure, when he guaranteed the vote on the proposal this Thursday.

“It is a very important project for the country, which refers to a form of taxation for 17 sectors whose high employability recommends this treatment. Therefore, a much-desired extension for the maintenance of economic activities that are absolutely essential for the generation of employment and work in Brazil,” said Pacheco after approval.

The rapporteur of the measure at the House, Vice President Veneziano Vital do Rêgo (MDB-PB), followed the agreement signed during the proceedings in the Chamber and did not make changes — which would result in the proposal returning to the Chamber.

Veneziano, for example, rejected an amendment proposed by senator Esperidião Amin (PP-SC) that seeks to include companies in the foundry sector among those benefiting from the tax exemption. Carlos Portinho (PL-RJ), in turn, unsuccessfully tried to include companies in the naval industry.

“We understand that after the increase in vaccination against covid-19 and the consequent reduction in the average number of new cases, the economic recovery imposes fiscal stimuli and the extension (or maintenance) of existing ones. Thus, we emphasize that the exemption proposed in this project is already historically appears in our order and, with the approval of this House, will continue to serve the same sectors,” said the rapporteur in his text.

Resources for the extension of the payroll exemption were assured with the enactment this Wednesday (8) of the PEC dos Precatórios. As Minister Paulo Guedes assured, the fiscal space opened by the PEC dos Precatórios will be directed towards actions such as the Auxílio Brasil program, purchase of vaccines and the tax exemption for companies’ payrolls.

In a statement, the Parliamentary Entrepreneurship Front affirms that it is an “indispensable step to give companies the conditions necessary to go through this difficult moment, not only preserving jobs, but also with the capacity to generate more jobs”, says text signed by the coordinator -General of the front, Deputy Marco Bertaiolli (PSD-SP).

The senators also approved this Thursday, in two rounds, a PEC (Proposed Amendment to the Constitution) that maintains benefits for the information technology, communication and semiconductor sectors, excluding them from the plan for the gradual reduction of tax incentives established in the Emergency PEC — enacted in March.

The proposal was approved in the first round by 66 votes in favor and two against. Moments later, he again received the approval of the senators, by 60 votes to two. 49 votes were needed in each round.

The text excludes the industrial policy for the information and communication technologies sector and for the semiconductor sector from the effects of the plan to gradually reduce federal tax incentives and benefits. This plan was to be submitted to Congress by President Jair Bolsonaro within six months of the enactment of the Emergency PEC.

Also on Thursday, the senators approved a bill that extends the exemption from IPI (Tax on Industrialized Products) on the purchase of vehicles for transporting passengers – taxis – and extends the benefit to people with disabilities. The benefit is extended until December 31, 2026.

The proposal was symbolically approved by the senators, but the outstanding votes, scheduled for next week, were pending.

Those benefiting from the measure will be able to buy new vehicles for up to R$ 200 thousand – considering the final price, including all taxes. Despite being approved, the senators reacted to a modification made by federal deputies, who pointed to the suppression of another benefit to pay for the exemption from the IPI provided for in the proposal.

The text provides for the extinction of the zero rate benefit of the contribution to PIS/Pasep and Cofins included in the acquisition of products intended for use in hospitals and other health service providers, as well as on semen and embryos.

Upon reading his text, rapporteur Romário (PL-RJ) stated that in politics “the great is the enemy of the good”, revealing his opposition to this change, but signaling that he accepted it so that the benefit could be implemented.

“The measure does not enjoy my appreciation, but it is necessary to open up fiscal space to accommodate the waiver of revenue, in the amount of R$ 1.891 billion per year”, wrote the rapporteur.

The government leader, Fernando Bezerra (MDB-PE), stated that this inclusion was necessary to indicate the source of funds for the exemption. He cited as an example other projects that ended up vetoed by President Jair Bolsonaro for not containing this nomination.

“I ask for attention so that we can deliver the benefit to taxi drivers and people with disabilities. This is because we need this source to comply with the Fiscal Responsibility Law, or else we would have to face a new veto,” he said.

The author of the project, Mara Gabrilli (PSDB-SP), stated that the inclusion of this item was about a “tortoise”. He pointed out that the compensation that was instituted exceeds by three times the amount that would no longer be collected with exemption from the IPI.

After an agreement in the plenary, the senators decided to vote on the basic text extending the IPI exemption for the purchase of new cars by taxi drivers and extending the benefit to people with disabilities. However, next Wednesday (15), lawmakers will vote on the project’s highlights regarding the funding sources for this benefit.