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On Wednesday (4), the senators approved, by 64 votes to 2, the lifting of the veto of President Jair Bolsonaro to the extension, until 2021, of the payroll exemption of companies in 17 sectors of the economy.
Earlier on Wednesday, the Chamber of Deputies also rejected the veto and, with the Senate’s decision, the National Congress overthrew the president’s veto. Now, the extension will be enacted.
>> Understand more below how the exemption works and how the government acted to try to postpone The vote.
Bolsonaro vetoed in July the device (introduced by Congress in a provisional measure) that extended until the end of 2021 the payroll exemption to companies in sectors such as call centers, communications, information technology, transportation, civil construction and textiles.
Currently, companies in these sectors employ more than 6 million people.
Although the excerpt from the exemption was vetoed by the President of the Republic, the last word on the matter fell on the parliamentarians.
This is because deputies and senators can revoke presidential vetoes and reestablish the texts approved by the Legislative Power and sent for sanction.
Due to the novel coronavirus pandemic, sessions of Congress have been held separately, at one point in the House and at another time in the Senate. Therefore, the deputies voted Bolsonaro’s veto in the morning and the senators in the afternoon.
House vote revokes presidential veto to extend payroll exemption
The exemption model allows companies to choose to contribute to Social Security with a percentage ranging from 1% to 4.5% of gross income instead of collecting 20% of the payroll.
Current law provides for the end of the exemption in 2020. With the lifting of the veto on the extension, the regime will be valid until the end of 2021.
The extension was included during Congressional analysis of an interim measure that instituted an emergency job maintenance program.
Workers again request the abolition of the veto to extend the payroll exemption
The veto was postponed for several months due to the articulation of the government, which was trying to close an agreement to compensate for the overthrow of the veto, taken for granted among parliamentarians.
Economy Minister Paulo Guedes even defended an “alternative tax” as a counterpart to the extension of the exemption. The proposal generated negative repercussions among parliamentarians.
Last week, Guedes said again that, without a new tax, he could not continue the discussion about payroll relief.
Congress may revoke presidential veto against continuation of relief on Wednesday
Workers’ unions and business associations in the sectors covered by the exemption have organized several events in recent months to overturn the presidential veto.
The sector entities argued that a definition on the subject was urgent so that companies could plan for 2021.
In addition, representatives of the segments stated that the end of the exemption, at a time of economic crisis, would generate layoffs.
During Wednesday’s sessions, deputies and senators also voted to overthrow Bolsonaro’s veto on the device that frees states and municipalities from meeting objectives with the Union under the Unified Social Assistance System (Sua) for four months.
