Payroll tax re-taxation approved; understand what the president vetoed

Payroll: How will the gradual re-taxation foreseen in the approved project work?

One of the points vetoed by President Lula was a provision that would allow the creation of collection and negotiation centers for fines applied by regulatory agencies. The idea behind this point was to recover resources from lawsuits or administrative proceedings.

In the presidency’s understanding, it is up to the Executive to create these centers.

Priority resources

Another point that the presidency vetoed was article 24, which defined that priority resources for the development of collection systems and negotiable conflict resolutions for the Federal Attorney General’s Office and the Federal Revenue Service would be allocated to the AGU and the Federal Revenue Service.

The president’s understanding is that this provision is contrary to the public interest, since it restricts the allocation of priority resources to specific bodies. This measure undermines the adoption of opportunity and convenience criteria in the allocation of resources for the public credit regularization policy.

90 dias

The article that provided for a 90-day deadline for the Executive to appoint a person responsible for the costs of developing, providing, maintaining, updating and administratively managing a unified system for establishing, managing and collecting non-tax credits in the administrative phase of federal public authorities and foundations was also vetoed.

In this veto, Planalto claims that the article would involve interference from the Legislature in exclusive attributions of the federal Executive.

Forgotten money

Another point vetoed in the project has to do with the transfer of forgotten funds in bank accounts — and without movement for many years — to the National Treasury. The basis of the proposal was maintained, what was vetoed was the section that allowed the account holder to claim the amounts from the banks until December 31, 2027.

At this point, the justification for the veto was a conflict of dates between other previous articles of the same law.

What changes in the re-taxation

The main points of the bill approved by Congress were maintained. It foresees that between 2025 and 2027 the payroll tax rate for employees will increase by 5% per year until reaching 20% ​​in 2028. The same applies to municipalities with up to 156 thousand inhabitants, which will start to increase the tax burden on their payrolls this year and will have the 20% tax rate until the end of 2027.

The vetoes were on specific points and do not directly impact the body of the text, explains tax lawyer and master in Law from PUC-SP, Thulio Carvalho.

“These are marginal points and the core of what was being discussed in the National Congress was maintained. The payroll tax increase will follow that model of a gradual transition. It will remain as it is now in 2024, and from 2025 onwards the rate on gross revenue will be reduced slightly and the rate on payroll will be increased slightly. Until 2028, the replacement regulation currently in force will be completely extinguished and the payment of the contribution on payroll will return to normal.”

Overthrow in Congress

Despite the arguments from Planalto, the Legislature reacted. Senator Marcos Rogério (PL-RO) said that the vetoes will be overturned.

“We are facing a situation in which the government will be defeated in the plenary session once again. The government vetoes and Congress overrides the vetoes, because this is an agenda that the National Congress is the guarantor of. And we have given alternatives, Congress has given the government an alternative for budget adjustment. I see no point in the government continuing with this model, it only harms those who employ the most in the country.”