Chamber Committee approves extension of payroll exemption until 2023

The CCJ (Committee on Constitution and Justice) of the Chamber approved this Wednesday (17th) the proposal that extends the exemption from the payroll of 17 sectors until the end of 2023, after a change that allowed changing the merit of the project in the collegiate .

The text was approved by symbolic vote. As the assessment at the CCJ was conclusive, the proposal goes straight to the Senate, where an agreement is already being built so that it does not change and is sent directly to the sanction.

The proposal was supported by almost all the parties — the PSOL advised against the measure and the Novo released the bench.

Initially, the proposal provided for the extension of the exemption of 17 sectors until 2026. However, on Tuesday (16) the acting president of the Chamber, André de Paula (PSD-PE), granted an application to include the examination of merit by the CCJ — the commission is responsible for verifying the constitutional and legal aspects of the proposals presented.

With that, deputy Silvio Costa Filho (Republicanos-PE) suggested that the rapporteur of the project at the CCJ, deputy Marcelo Freitas (PSL-MG), contemplate the extension until the end of 2023, instead of 2026, in line with the signaling made by President Jair Bolsonaro, who, on the 11th, said that the government would extend the measure for two years.​

In response, the rapporteur said that on Tuesday, at the end of the night, an agreement was reached to extend the exemption until December 2023, with the government’s commitment not to veto the text.

The proposal indicates that an act of the Executive Power will define mechanisms for monitoring and evaluating the impact of the tax exemption on the payroll and the maintenance of jobs in the companies covered by the measure.

Author of the project, DEM leader in the Chamber, Efraim Filho (PB), defended that the extension of the exemption is beneficial for Brazil. “It is not just a government solution, it is a solution for the State, for the nation. The biggest challenge for Brazil is to preserve jobs and generate new opportunities,” he stated.

“It’s a win-win project. A project that has the support of the productive sector, of entrepreneurs, which values ​​those who produce in Brazil, reduces the tax burden, reduces taxes. It is a project that is supported by the working class, union centrals took to the streets ask for project approval,” he said.

“And, finally, now we have broken the resistance of the Ministry of Economy, on the grounds of not thinking about tax collection and thinking about generating jobs.”

In a statement, the Parliamentary Entrepreneurship Front stated that the decision was essential to “give breath for companies to go through the post-pandemic, not only with the ability to maintain jobs, but also with conditions to generate more jobs.”

“This approval is the result of months of intense dialogue with the main segments of the productive sector”, stated the president of the Front, deputy Marco Bertaiolli (PSD-SP).

“Today, the Chamber has demonstrated once again that it has the necessary leadership and sensitivity to face the country’s urgent challenges — we are dealing with more than 13 million unemployed, the closure of more than 10 million companies due to the pandemic and the increase in extreme poverty.”

Deputy Pompeo de Mattos (PDT-RS) said that the approval was important to give an answer to the entrepreneur, the businessman and the worker. “The project is not from the right and it is not from the left. It is not for the government or the opposition. It belongs to Brazil. We need to give these answers, this satisfaction to the citizen,” he stated. “We have a responsibility to do our part.”

While the proposal was being considered, the CTASP (Labour, Administration and Public Service Commission) rescheduled the summons of Minister Paulo Guedes (Economy) for the 23rd.

Until Bolsonaro’s declaration, the government acted to block the project, according to the economic team’s assessment that it was necessary to create a tax along the lines of the extinct CPMF to offset a broad cut in labor charges.

On the 11th, the president stated that he would extend the measure until 2023. “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.

“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 proposal aims to maintain the reduction in the costs of hiring workers by companies in the 17 sectors. The incentive is scheduled to end in December 2021.

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.

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 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.