Planalto maneuver to relieve sheet without compensation puts TCU on alert

The decision of President Jair Bolsonaro (PL) to sanction the extension of the exemption from the payroll of 17 sectors without adopting tax measures to compensate for the loss of R$ 9.1 billion in revenue in 2022 triggered an alert in the TCU (Tribunal de Contas). of the Union).

The Ministry of Economy’s recommendation was to keep the IOF (Financial Operations Tax) surcharge on credit operations and the CSLL (Social Contribution on Net Income) higher on banks.

The portfolio, however, was ignored by the Planalto Palace, and both charges expired at the end of 2021.

On Saturday (1), the General Secretariat of the Presidency of the Republic stated that the compensation would not be necessary because “it is an extension of an already existing tax benefit” and because the measure “was considered in the Bill’s Revenue Estimate Report Budget 2022”.

The agency also said that the measure was given “in terms of the guidance issued by the Court of Auditors of the Union”.

Court members, however, assess that TCU’s guidance does not open any loophole for granting benefits without the waiver being provided for in the Budget or with compensation, even if it is an extension of an existing policy.

In addition, contrary to what the government said, the resignation was not considered in the 2022 Budget revenue report, according to the rapporteur of the matter in Congress, senator Oriovisto Guimarães (Podemos-PR). “this note [da Secretaria-Geral] is wrong,” he said.

According to the senator, he could not incorporate the new revenue forecast because the law extending the exemption had not yet been enacted by Bolsonaro. “We can’t estimate revenue based on ‘I think,'” he said.

Oriovisto also told the leaf that there was an articulation to try to change the revenues in the 2022 Budget after the text had already been approved by deputies and senators. The objective would be to include the waiver with the exemption to regularize the situation.

“They started with a silly story that I could make an application asking to change the revenue, the General Rapporteur for the Budget, Deputy Hugo Leal, would agree, the Speaker of the Chamber would agree, the President of the Senate would agree, Rose de Freitas, President of CMO [Comissão Mista de Orçamento], would agree, and we would change,” he said.

“Now that’s ridiculous. If half a dozen people can change the law that the entire Congress passed, then we’re going to close Congress and hire just these six,” the senator said.

He said he received a phone call from senator Rose de Freitas (MDB-ES) with the proposed agreement. According to him, other people would be involved in the discussions, but he preferred not to mention other names.

“The budget law is approved by 513 deputies and 81 senators. How is it that half a dozen later… I’m going to file an application and the others are going to change it without going through Congress?”

Sought, the senator did not respond until the publication of this report.

The extension of the payroll exemption was sanctioned in the last hours of December 31, 2021 — a way of trying to strengthen the argument that it is just an extension, not a new benefit.

The Ministry of Economy, which disagreed with this interpretation, pointed out the measures that could be adopted at the time of sanctioning the payroll exemption to serve as compensation.

On Wednesday (29), the secretary of the National Treasury, Paulo Valle, confirmed the need for compensation for the extension of the payroll tax exemption.

“It still has to be defined, but it will certainly have to be compensated, with income or expenses. There will still be a discussion in this regard,” he stated at the time.

On Friday (31), the sanction was published in an extra edition of the Diário Oficial da União without the measures of the IOF or CSLL, which surprised government technicians who had been discussing the compensations.

The AGU (Attorney General’s Office) itself pointed out the need for a full veto of the exemption, or sanction accompanied by measures indicated by the Economy, according to sources heard by the report.

The General Rapporteur for the Budget, Deputy Hugo Leal (PSD-RJ), confirmed the leaf that the impact of the tax relief on revenues was not accounted for in the processing of the piece in the National Congress.

“It was not foreseen, due to the lack of a statement from the Ministry of Economy at the time of voting on the Revenue Report,” he said.

Leal even forwarded to the president of the CMO, on December 28, a letter warning about the lack of revision in the forecast of tax waivers.

“I request that, together with the Autograph of the Budget Law of 2022, this file be forwarded to the Executive Branch, in order to enable the necessary adjustments in the revenue”, says the document.

The deputy, however, stated that the General Secretariat’s justification is in line with the interpretation that it is an extension. “It was an understanding and the reason why [a lei] was sanctioned on December 31, to be treated as an extension and not a new tax deferral,” he said.

According to people who follow the discussions at the TCU, the trend in the court, however, is that the extension of the exemption is understood as a new granting of tax benefit.

In the consultation cited by the General Secretariat, the TCU clarified that the requirements of the LRF (Fiscal Responsibility Law) for the granting of tax benefits will be met when at least one of the following conditions is fulfilled: the waiver is considered in the budget law or there is a measure to compensate for lost revenue.

“The demonstration by the proponent that the waiver was considered in the estimated revenue of the Annual Budget Law, pursuant to article 12 of Complementary Law 101/2000, and that it will not affect the fiscal result targets provided for in the annex to the Law of Budget Guidelines, makes the forecasting and implementation of compensation measures not mandatory,” said the TCU in a November 2021 ruling.

In the case of exemption, none of the conditions were fully met.

According to members of the court heard by the report, the case could become the target of a specific representation, or be analyzed within the scope of the 2021 government accounts, under the report of Minister Aroldo Cedraz.

When contacted, the Ministry of Economy said that questions about the exemption should be sent to the Palácio do Planalto.

A leaf questioned the General Secretariat, the Civil House and the Communication Secretariat of the Presidency of the Republic, but there was no response until the publication of this report.

The sectors affected by the tax exemption are footwear, call center, communication, apparel and clothing, civil construction, construction companies and infrastructure works, leather, manufacturing of vehicles and bodies, machinery and equipment, animal protein, textile, information technology , communication technology, integrated circuit design, subway-railway passenger transport, collective road transport and road freight transport.