Bolsonaro says it will extend the payroll exemption for 17 sectors for two years

President Jair Bolsonaro (no party) said this Thursday (11) that the government will extend for two years the exemption from the payroll of 17 sectors.

The government was against the measure until this moment. The benefit, which ends at the end of this year, must be extended through a bill in the Chamber. The text extends to 2026, but must be changed to 2023 by agreement.

“We decided to extend the issue of payroll exemption for another two years, including [da] my dear press. Nobody was left out, not even you [jornalistas]”, said the president, in a critical tone to the press.

“This has to do with maintaining jobs. We are in a post-pandemic situation, and we must help these sectors. In other words, whoever is elected in 22 will have 23 all to resolve this issue of exemption”, continued the president , during a ceremony at the Planalto Palace.

The decision comes after a meeting between the representative and Paulo Guedes (Economy) and Tereza Cristina (Agriculture), with the participation of representatives from the sectors.

The government claimed that there was no budget space for the measure.

With the benefit for the 17 sectors, it gives up R$ 8.3 billion.

The change of position was part of an agreement between the government, especially the Economy, with some deputies, by votes by the PEC dos Precatório, approved this week in the Chamber.

Deputy Jerônimo Goergen (PP-RS), rapporteur of the bill that extends the benefit until 2026, told the sheet having voted in favor of the proposal, after having talked to the minister.

Guedes conditioned the payroll exemption to the approval of the measure. He said that everyone knows that he is in favor of the tax benefit, but that only with the PEC there will be fiscal space.

The deputy called the proposal “very bad” and “sticking ceiling”. “But I didn’t negotiate a secret amendment, nothing, I negotiated something that was useful. I talked to [os deputados] Beer [Kicis, PSL-DF, presidente da Comissão de Constituição e Justiça] and Arthur [Lira, PP-AL, presidente da Câmara], who assured me that the project will move forward,” he said.

The bill has been stopped at the commission, due to the government’s articulation to prevent it from advancing.

In September, the government tried to make the payroll tax exemption conditional on the approval of the Income Tax reform. The Economy wanted to include the digital tax in the text, which did not work out.

Now, they are negotiating with the so-called PEC do Calote, which postpones the payment of court orders (debt of the Federal Government that can no longer be negotiated).

In addition, the proposal is vital for the payment of Auxílio Brasil, successor to Bolsa Família and the main social program and flag of Bolsonaro in 2022.

The government manipulated the spending ceiling by including a change in the calculation of the fiscal rule in the PEC text. As a result, the government gains budgetary slack of around R$90 billion in 2022, an election year.

Auxílio Brasil has R$35 billion in next year’s budget. With the change in the ceiling, they will get around BRL 50 billion more

During the ceremony at Planalto on Thursday, in which he announced the change in posture regarding the exemption, the president also took the opportunity to ask for support from the sectors for the PEC of Precatório .

“We asked them [setores] to collaborate with us, dear Ciro [Nogueira], to approve the question of Precatório there. There is a lot that is uninformed in Brazil, no one wants to default on anyone,” said the president.

In the afternoon, during his weekly live, Bolsonaro spoke once more about the extension of the exemption and said that the sectors made a commitment to help not only with the PEC dos Precatório, but also with the administrative reform.

Approved in the House, the proposal faces resistance in the Senate. Palace helpers are still betting on the PEC as plan A for the aid, but they fear that the House will not approve the measure in time to pay for it in December. Therefore, it is already preparing an interim measure as plan B.

Bolsonaro’s appeal has, for now, been successful. In a statement at the Palácio do Planalto, a group of representatives from the sectors stated that they will work with parliamentarians and other political leaders to approve the PEC dos Precatório. They also said that, without the extension of the exemption, there will be layoffs in several Brazilian municipalities.

“If by chance the exemption did not pass, we would have layoffs in those cities, which is chaos. Because in those cities they don’t have another job”, said the president of the ABT (Brazilian Association of Teleservices), John Anthony von Christian.

“Our mission now is that the PEC of precatório passes through the Senate. We are going to talk to our bases, with senators and governors, for this to pass; and then we are also going to help the government in new reforms, such as the administrative one, and others that will generate more resources for Brazil.”

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 17, until last year, when Bolsonaro extended the measure for another year.

The sectors benefited today are: footwear, call center, communication, civil construction, construction and infrastructure works, leather, textile, vehicle manufacturing, animal protein, clothing, machinery and equipment, technology, information technology, collective road transport and transportation cargo, design of integrated circuits and subway-railway transport of passengers.