Treasury evaluates expanding payroll exemption for hires of up to three or five minimum wages
In the final stretch of the tax reform negotiations with the government, the deputy tried to implement an amendment to the text by deputy Aguinaldo Ribeiro (PP-PB) to allow the commerce and services sector to use taxes or social security contributions on the payroll to generate credit in the new tax system, that is, that expenses with labor – the main input of these segments – would reduce the tax to be paid.
The rapporteur and the government did not accept the amendment, but Haddad committed to presenting a proposal, in early August, to relieve the payroll of the productive sector, says Gastão.
“Minister Haddad informed us that an advanced study was being conceived by the Ministry of Finance. He recognizes (the need to relieve) mainly service sectors that employ labor of one to three or five minimum wages, which are intensive in labor work and (he said) that, in August, at the beginning of the second semester, he would already be looking for a proposal to alleviate this problem and make these companies more competitive”.
Lawyer Karoline Lima, specialist in institutional and governmental relations at the National Confederation of Shopkeepers (CNDL), says that extending the exemption is positive for the sector.
“Minister Haddad, in agreement with us, said that he will propose, in the second half of the year, the possibility of a payroll exemption, at least for hiring of up to three to five minimum wages. This agreement was made with deputy Luiz Gastão and was a light at the end of the tunnel”, confirms Karoline.
Today, payroll exemption includes companies from the 17 sectors that employ the most in the country. The mechanism allows that, instead of paying 20% on the payroll to Social Security, companies can choose to pay from 1% to 4.5% on their billing. In general, this is usually more advantageous for employers.
Payroll exemption for these 17 sectors is expected to end this year, but at the end of June the Senate approved a bill to extend the mechanism until the end of 2027. The Chamber of Deputies has yet to confirm the extension.
The productive sector argues that the costs linked to the payroll of formal workers in the country are very high, which burdens companies and prevents the expansion of the labor market. Relieving the payroll means, in practice, reducing these costs, explains Gastão.
“The allegations are that worldwide you have a single Value Added Tax (VAT) for commerce and services. That’s okay, but worldwide you don’t have a payroll charge, whether for taxes, social security contributions and third-party payments, vacations, Christmas bonus and labor charges, which mean that for every real you pay, you have a real payroll tax, which makes the cost of labor very high”.
Compensation
According to Karoline Lima, the government signaled that exemption would be possible as long as there was a source of funds to compensate for the loss of government revenue. She said that the minister proposed the taxation of profits and dividends, within the scope of the reform on income and assets, which the government should send to the National Congress in August.
“It is another point of attention, because it will reduce the cost on the payroll, but it will increase the piece that the State takes on the dividend, on the profitability of the companies. So, it will take it out of the same pocket, you know?”, question.
Luiz Gastão said that it is necessary to have access to figures from the Ministry of Finance to understand whether the expansion of the exemption for hiring from one to three or five minimum wages would cause a loss of revenue for the government. He believes that by reducing costs for the productive sector, there may be a stimulus to the labor market and the economy that, in itself, compensate for the extension of the mechanism.
By Brasil 61
