CCJ of the Chamber approves the extension of the exemption until 2023; text goes to the senate

The Constitution and Justice Commission (CCJ) of the Chamber approved this Wednesday (17) the bill that extends the exemption on the payroll of the 17 sectors that employ the most.

At the request of the government, the rapporteur, deputy Marcelo Freitas (PSL-MG), changed the original text and reduced the extension of the benefit that reduces the charge levied on salaries to two years instead of the five initially proposed. As it is conclusively underway, the initiative follows from the commission to the analysis of the Senate, without the need to go through the plenary of the Chamber.

The tax simplification model has been in place since 2011 and benefits companies by reducing labor charges. The current deadline for the end of the measure is December 31 of this year.

Supporters of the text point to the need for exemption to avoid dismissals. Together, the 17 sectors (call center, communication, information technology, transport, civil construction, textile) employ 6 million workers. “Brazil will have every incentive to grow, expand employment opportunities and improve workers’ income”, observed deputy Marcelo Freitas.

The rapporteur also pointed out the negative impact that the end of the measure could have on the price of products, with the passing on of the increase in the cost of production to the consumer. “The proposed changes lead to changes in the companies’ cost structure, which will certainly impact the prices of goods and services, helping to cool down inflation”, wrote Freitas in the opinion.

The project is authored by deputy Efraim Filho (DEM-PB) and was approved by the Chamber’s Finance and Taxation Committee in September. After that, the project was shelved at CCJ for almost two months.

The exemption gained momentum after the approval by the Chamber of the Proposal for Amendment to the Constitution (PEC) of precatório, which postpones the payment of debts that the government is legally obliged to make and changes the calculation of the spending ceiling. The PEC was created to allow the reformulation of Bolsa Família, the Auxílio Brasil, but government officials also cited it as a condition for the exemption to be extended.

With the approval of the proposal that opens fiscal space, President Jair Bolsonaro publicly declared himself in favor of the extension for another two years. Congressman Silvio Costa Filho (Republicanos-PE) suggested during the session that the opinion be changed to change the deadline suggested by the government. “With that, we build a consensus and don’t run the risk of the government vetoing. Also because the information we have is that there will be no veto after two years”, he declared.

The suggestion was accepted by the rapporteur, who presented a supplementary vote to change the deadline. Author of the project, which originally provided for an extension to 2026, Efraim expressed agreement with the reduction of the term. “The deadline is a secondary, peripheral issue. The important thing is the concept of the proposal”, he said.

On Tuesday, 16, the leader of the government in the Senate, Fernando Bezerra Coelho (MDB-PE), assessed that the measure was accepted by the Senate. “I have the impression that the climate of the Senate, from what I hear from the senators and from President Rodrigo Pacheco himself, is an extremely valuable instrument for maintaining jobs,” he declared.

“We need to value the generation of new jobs and above all maintain jobs, especially in the service sector,” added the government leader.

Exemption benefits companies because it reduces the labor charges they pay. The measure consists in exchanging the taxes on employees’ salaries for a tax on income. Today, these companies can choose: either they pay a 20% social security contribution on employees’ salaries or a rate ranging from 1% to 4.5% on gross sales.