Lack of definition regarding the measure to compensate for payroll tax relief hinders planning in the production sector, experts claim

The deadline began to run on May 20th, since minister Cristiano Zanin reversed his own injunction, which suspended the exemption. The condition for the benefit to continue is that, by mid-July, the government and National Congress reach an agreement on a source of resources to neutralize the loss of revenue from the mechanism.

If a compensatory measure is not approved by then, companies in the 17 exempted sectors will have to return to paying the 20% social security contribution on employees’ payrolls, instead of being able to contribute 1% to 4.5% of revenue. . The benefiting municipalities will now contribute 20% to the INSS and no longer 8%.

According to economist Alexandre Azzoni, the lack of definition is harmful to the productive sector. “When you burden the payroll, you limit the growth of companies. The company will not hire more, because the collection will be absurd. It breaks any planning. Companies closed their plans last year based on the collection system (by revenue )..”

Impasse

At the end of last year, the National Congress approved the continuation of the payroll tax exemption for the 17 sectors until the end of 2027 and the extension of the mechanism to municipalities with up to 142.6 thousand inhabitants. The government vetoed both measures, but parliamentarians overturned the Executive’s vetoes.

A few days later, the Ministry of Finance presented a Provisional Measure that ended the exemption for municipalities and eight sectors of the economy, while for the remaining nine sectors it established a gradual schedule for increasing social security contribution rates, which would go from 10% to 15% in 2024, to 20% in 2028.

The negative repercussion of the MP among parliamentarians and representatives of the sectors caused the government to back down, until in May the Executive filed a lawsuit with the STF questioning the continuity of the exemption. Minister Zanin gave a favorable opinion to the government, but he suspended the injunction after an agreement between the Legislative and Executive branches.

Tax lawyer Eduardo Natal criticizes the back and forth around the exemption. “Having this constant movement creates a lot of uncertainty, especially in relation to future planning. It may not have an immediate impact on jobs, but in relation to planning for the future, I have no doubt that the entrepreneur must be reviewing investments and development of your activities. You end up having losses for the country, because you have less legal security to generate investments, which result in jobs”, he assesses.

Find out what payroll relief is

Payroll relief: government should present compensation measures this Friday