The tax reinstatement bill will be sent to Congress as an expedited procedure, says Haddad.
Provisional Measure 1202, issued by the Executive Branch at the end of the year after President Lula's veto of the tax exemption extension was overturned, stipulated that the tax would be reinstated as early as 2024.
BRASILIA (Reuters) - Finance Minister Fernando Haddad said on Wednesday that he had accepted a request from the president of the Senate, Rodrigo Pacheco (PSD-MG), so that the reintroduction of payroll taxes and other proposals already approved by the National Congress in 2023 could be sent to Congress as bills under an expedited procedure.
A point of friction between the government and the legislature, the full extension of payroll tax relief until 2027 for 17 sectors of the economy was approved by Congress in November, but President Luiz Inácio Lula da Silva vetoed the initiative, contradicting parliamentarians who overturned the veto. Provisional Measure 1202, issued by the Executive branch at the end of the year after the veto was overturned, stipulated that the tax would be reinstated as early as 2024.
"President Pacheco made a proposal to the president (Lula), who consulted me this morning, regarding the fact that the projects that were deliberated last year by Congress should be forwarded as bills with constitutional urgency. So that's what we're going to do," Haddad said in an interview with journalists as he left the ministry.
Earlier, in a press conference, Pacheco commented on the case, suggesting procedures for the change. "The instrument that seems reasonable to me is the issuance of a provisional measure that makes this change to the previous provisional measure, and the presentation of the bill. And then the constitutional urgency, or not, in what terms the bill will come, the government has to be asked about that," he said.
In the ministry, Haddad also stated that he spoke with the president of the Chamber of Deputies, Artur Lira (PP-AL), to ask him to give the Federal Revenue Service more time to analyze the Perse numbers before starting discussions about the program's future in Congress.
"There is a controversy surrounding the figures, and the Federal Revenue Service will resolve this controversy. So I asked him (Lira) for a little more time. As you know, the Revenue Service's work was paralyzed until last week. We will address this as quickly as possible... I have already agreed with President Lira that I myself will present these figures," said the minister.
Regarding Perse, Pacheco said there is still no consensus on how the issue will reach Congress, whether as a Provisional Measure or a Bill, as discussions are still needed with the Speaker of the House and the other leaders of the Houses.
"Minister Fernando Haddad and the Finance Ministry are conducting a survey regarding the impact of the Perse program on tax collection and the Brazilian tax system. And obviously, dialogue is now necessary and must be carried out immediately with both Houses of the Legislature, and with President Arthur Lira himself," he stated.
The Perse program grants tax benefits to the events, hospitality, restaurant, and other sectors, and its gradual end is established in the same Provisional Measure that deals with the reintroduction of payroll taxes, due to the impact on public finances, estimated between 17 billion and 30 billion reais by government leaders.