Moraes resolves impasse between government and Congress and upholds IOF decree, with the exception of "withdrawn risk".
This measure ends, at least temporarily, the political dispute between the Executive and the National Congress regarding the issue.
247 - Supreme Court Justice Alexandre de Moraes decided on Wednesday (16) to largely reinstate President Luiz Inácio Lula da Silva's (PT) decree that increased the IOF (Tax on Financial Operations) rate, reports the g1 portalThis measure ends, at least temporarily, a political dispute that pitted the Executive branch against the National Congress on the issue.
With the minister's injunction, the presidential decree is reinstated — with the exception of one sensitive point: the application of IOF (Tax on Financial Operations) to "draft risk" type operations, a type of credit widely used by small and medium-sized retail companies. In this type of operation, financial institutions advance funds from sales made on credit, allowing merchants to have working capital before actually receiving payment for the sales. The government's proposal was to start charging IOF on this type of operation, which generated a reaction from the sector and resistance in Congress.
The suspension of this item had already been signaled as likely by the Finance Minister, Fernando Haddad. According to him, the tax on the withdrawn risk represented about R$ 1,2 billion of the estimated R$ 12 billion in revenue from the new tax collection model this year.
