Leaders Seek Agreement to Revoke Veto on Corporate Payroll Tax Relief | Politics

Current legislation establishes that the exemption of the payroll of companies in 17 segments of the economy will continue until the end of this year. These sectors include call centers, information technology, transportation, civil construction, textiles, and communications.

MPs in favor of repealing the veto believe that re-overloading companies in the context of the coronavirus pandemic would be a stimulus for layoffs, making it difficult to resume the economy and create jobs.

In June, Congress included in the provisional measure on the reduction of hours and wages due to the pandemic a device with the aim of extending the exemption for these segments until the end of 2021.

By sanctioning this deputy, on July 6, President Jair Bolsonaro vetoed the extension of the tax incentive to the 17 sectors. The veto was suggested by the Minister of Economy, Paulo Guedes. Before the Legislature, the government stated that the extension of the exemption will generate an income exemption without equivalent cancellation of expenses.

When the President of the Republic prohibits a measure approved by Congress, the parliamentarians can reject the veto and rescue what they had previously approved.

The deputy with the extension of the exemption was approved unanimously by the senators present at the June 16 session. In the Chamber, in May, the text also received broad support from the parties.

This Sunday (6), a month has passed that the veto to extend the exemption is blocking the agenda of the National Congress. That is, as long as it is not analyzed, other projects cannot be voted on.

Other vetoes, older than the exemption, also block the congressional agenda. Among these are, for example, Bolsonaro’s vetoes of the anti-crime package, approved by Congress after suggestions from former Justice Minister Sergio Moro and STF Minister Alexandre de Moraes.

A meeting of party leaders is scheduled for next Tuesday (8) with the leader of the government in Congress, Eduardo Gomes (MDB-TO), in which the veto of the exemption will be discussed.

Gomes told TV Globo that he is seeking an understanding for the veto analysis.

The leader of the PSD in the Senate, Otto Alencar (PSD-BA) declared that the bench he represents is willing to help the government in voting the vetoes against the anti-crime package, in order to make the session feasible to revoke the exemption veto.

For the Bahian parliamentarian, there are already enough votes, at least in the Senate, to modify Bolsonaro’s decision. “When it is scheduled, it will be overthrown,” summarized Otto Alencar.

The senator affirmed that the lifting of the veto is necessary for the maintenance of jobs and also for the planning of the companies for the year 2021, since the 2020 income was greatly affected by the Covid-19 pandemic.

“With the unemployment you are already experiencing today, you will still have an increase in the tax burden in a year [2021] Would it be due to the recovery of the Gross Domestic Product, from this drastic fall in GDP that we are experiencing? We are going to put this very strong in the meeting ”, anticipated Otto Alencar.

The PSD leader was optimistic about the possibility of an agreement to reject the veto. “Logging is essential to provide legal security in 2021. Seventeen activities are unable to plan the maintenance of the industrial base and jobs,” he emphasized.

The deputy leader of the opposition, Deputy Orlando Silva (PCdoB-SP) was the rapporteur of the provisional measure in the Chamber. He said that if the meeting takes place next Tuesday, he will defend the analysis and lifting of the veto.

“The government is afraid to put [o veto] on the agenda because he knows he has no votes to maintain, “said the deputy about the delay in the veto.

A senator close to the government told TV Globo that the understanding with the Executive regarding the possible rejection of the veto is “well under way.”

There is still no fixed date for the session in which the veto of the exemption will be voted. There was an expectation for it to happen this week, but, so far, the session has not yet been confirmed.

The executive president of the Brazilian Association of the Machinery and Equipment Industry (Abimaq), José Velloso, says that the 17 sectors that are currently entitled to the exemption are responsible for 6 million direct jobs, which generate a series of indirect jobs.

For him, the loss of incentive would cause an increase in unemployment, at a time when the country is already suffering the crisis caused by the new coronavirus.

“If we have the compensation, there are calculations that the number of newly unemployed people can range between 500 thousand and 1 million. Hence the importance of maintaining the payroll franchise until December 2021, ”said Velloso.

Ricardo Santin, president of the Brazilian Association of Animal Protein (ABPA), defends the analysis of the presidential veto as soon as possible, so that companies can plan for next year.

“The important thing for our companies is the legal certainty of working knowing what environment we are going to face next year,” he said.

“We are approaching the periods in which annual budgets are made for next year, and companies are not in a position to decide now without knowing if they will be exempt from payroll in 2021,” Santin added.

According to him, some sectors such as poultry, pork and eggs are pressured by the high prices of basic inputs, such as corn and soybean meal, due to the pandemic caused by Covid-19. If the veto is not lifted, the pressure will be even greater and the cost can be passed on to consumers.

“In our case, we have a cost pressure for the basic inputs of soybeans and corn flour that will be directly reflected in the price to the consumer, and the maintenance of the foliar load will also respond with costs for our consumer,” he said.

Luigi Nese, president of the National Confederation of Services, advocates permanent exemption for all sectors of the economy. “To reduce this burden on wages,” he said.

Law passed in 2018 by then-President Michel Temer established the re-taxation of the payroll of 39 sectors of the economy that previously had this tax benefit.

However, at that time, the 17-segment exemption was in place until the end of 2020.