Senate has favorable climate for payroll tax exemption, says government leader

The government leader in the Senate, Fernando Bezerra Coelho (MDB-PE), said that the trend in the House is favorable to the proposal that extends the exemption from the payroll for the 17 sectors currently benefiting from the measure.

“I have the impression that the atmosphere of the Senate, from what I hear from the senators and the president himself [da Casa], Rodrigo Pacheco, is an invaluable tool for maintaining jobs. We need to value the generation of new jobs and, above all, maintain jobs, especially in the service sector,” stated Bezerra this Tuesday (16).

Last week, President Jair Bolsonaro announced that the government must extend the measure for another two years. The exemption is scheduled to end at the end of December.

The government also started to leave the way open for the project that extends the measure. Currently, the proposal is in the CCJ (Committee on Constitution and Justice) of the Chamber. The expectation is that the text is voted on this week. Afterwards, it will proceed to the Senate.

Bezerra once again said that the government expects a change in the TCU’s (Court of Accounts of the Union) stance on how to deal with the extension of the measure.

According to him, the court may review this week its understanding of the need for compensatory measures for initiatives in which the Executive gives up tax revenue. A new court resolution on the matter is expected to be voted on next week.

With that, it would be possible to extend the payroll exemption to 17 sectors without necessarily using the fiscal space opened by the possible approval of the PEC (proposed amendment to the Constitution) of the Precatório.

Today, the tax relief —a measure aimed at reducing the cost of hiring labor— is accounted for as an expense for the government in the Budget. The estimate is that, if extended with the current rules (need for compensation), the expense would be in the order of R$ 8.3 billion next year.

“We are awaiting a statement from the Federal Court of Accounts, which should take place tomorrow [quarta] about the not need to make compensation on the tax exemption issue, since these 17 sectors are not collecting taxes. So there would be no need, with the extension, the need to compensate for this in order to eliminate any type of violation of the fiscal responsibility law,” stated Bezerra.

The payroll tax exemption, adopted by the PT government, allows companies to contribute with a percentage ranging from 1% to 4.5% on gross revenue, instead of 20% on employee compensation for Social Security (employer contribution ).

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

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.

Representatives of these segments and deputies who articulate the extension of the measure until December 2026 argue that the withdrawal of the benefit would raise the costs of companies, which would put jobs at risk at a time when the country is trying to recover from the crisis caused by Covid-19.