Lula’s ministers defend quality vote in CARF in dialogue with Congress

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Finance Minister Fernando Haddad (PT) received leaders from the Chamber of Deputies this Monday (6) in an attempt to open dialogue and avoid a government defeat in the vote on the package of measures to recover federal revenues.

One of the central points of the meeting was the defense of the MP (provisional measure) that reestablishes the so-called casting vote in Carf (Administrative Council of Tax Appeals), an administrative court that judges tax disputes between taxpayers and the Federal Revenue Service.

The device guarantees the Union the tie-breaking power in decisions, but was overthrown in 2020, in the Jair Bolsonaro (PL) government. This made some decisions lean towards the taxpayers, imposing billionaire losses on the Union.

In one of his first actions at the head of the Treasury, Haddad proposed the resumption of this vote by MP (provisional measure), effective immediately. The measure, however, faces resistance from parliamentarians and businessmen.

On Monday, the minister received leaders from allied acronyms, such as the MDB, PSB, PDT, PV, PSD and PC do B, in addition to the PT itself, to discuss the proposal.

“I received the parliamentarians because it will be our practice, which in my opinion has to be done again, which is the willingness of the ministry to dialogue with the Parliament, receive the leaders, receive the parliamentarians”, said Haddad.

According to him, government leaders in the Chamber, Deputy José Guimarães (PT-CE), and in the Senate, Jaques Wagner (PT-BA), were responsible for providing “technical clarifications” on the package. In the coming days, the Minister of Finance should also receive allied leaders in the Senate.

The chief minister of the Secretariat for Institutional Relations, Alexandre Padilha (PT), also participated in the meeting and said that the government will continue to defend the maintenance of the casting vote in the dialogue with Congress, despite resistance.

“Minister Fernando Haddad brought very important data to the deputies about the importance of the Carf MP. The minister made it very explicit, today there are about 100,000 processes that reach Carf, only 2% of these processes are in a tie situation, in which the government’s casting vote has a very important weight,” said Padilha.

According to him, these companies have an approximate volume of R$ 600 billion in debt with the Union. “They are tax payment resources, which could go to health and education”, he said. “These data are very important for the debate in the National Congress.”

The minister, however, indicated that the terms of this maintenance could be discussed in Congress.

As the Panel SA column showed, businessmen opposed to the return of the casting vote propose an agreement with a “regulation”: in the event of a tie, the principal amount remains charged, but fines and interest drop, as long as the debt is settled within a stipulated period.

Taxpayers would still retain the prerogative to go to court — in this case, interest would be charged again, but not the fine.

“The government will maintain the defense of the casting vote, and throughout the debate that is being held, at no time will it withdraw the casting vote from the government,” said Padilha. “The casting vote can be decisive for not having tax injustice.”

Later, Haddad reiterated that the casting vote affects a small number of companies and signaled a willingness to dialogue. “We are in conversation with taxpayers affected by the measure. We are talking about 100 or 200 taxpayers. We are not talking about taxpayers in Brazil, we are talking about very specific, controversial cases, which end up causing damage to the treasury”, he said.

The Minister of Finance also stated that the understandings with the OAB (Order of Lawyers of Brazil), which filed a lawsuit against the government’s MP, and with the Judiciary are also advancing.

The agreement, however, is controversial. Federal Revenue technicians and the category’s union say that the agreement frees taxpayers from paying interest and fines without concrete guarantees of the effectiveness of the policy.

For the auditors, a hit in this direction could encourage litigation, since more companies will turn to Carf in an attempt to get rid of the charges. In addition, without interest correction, inflation will erode the real value of the debt, increasing the Union’s losses and indirectly penalizing those who paid the tribute on time.

Padilha said that criticism of the agreement was not the subject of the meeting with the leaders. “The object of the meeting was the minister presenting the data,” he said.

On Sunday (5), the National Forum of Governors published a letter in support of maintaining the casting vote in CARF.

“The reconstitution of the casting vote in CARF ratifies the constitutional principle of the supremacy of the public interest over the private”, says the document.

The states are concerned that the overthrow of this provision, classified as an “anomaly in the tax administrative process”, will be extended to the state tax authorities, harming inspection and encouraging “irregular practices”.

“The National Forum of State and Federal District Governors supports the Ministry of Finance’s initiative”, says the letter, signed by 21 of the 27 governors.

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