There are doubts about the benefit of the payroll exemption for employment, says specialist

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In the assessment of the economist and specialist in public accounts, Murilo Viana, it is not clear whether the maintenance of the payroll exemption for another two years brings benefits.

Last Thursday (11), president Jair Bolsonaro stated that he will maintain the measure for companies in 17 sectors.

In an interview with CNN Rádio, Murilo explained that the subject is “something discussed for many years”, but that it raises questions: “From the point of view of job preservation, there is doubt about its effectiveness.”

This is, according to the expert, because, in Brazil, “we do not have instruments for the periodic evaluation of expenses”, which makes it difficult to quantify the scope of the tax benefit.

“There are studies, such as those by IPEA, which indicate that the exemption has a modest effect on the preservation or generation of employment”, he pointed out.

At the same time, Murilo highlighted that “the atypical context of the Brazilian economy”, with unemployment and a relevant cash problem, “increases the unknown”: “Amidst the turmoil of uncertainties, ending the tax exemption can be complicated, but it is necessary to implement more closely monitoring measures of expenditure.”

“Unfortunately, the Brazilian tradition of little transparency and evaluation of public policies, especially expenditures”, he lamented.

In practice, by releasing companies from 17 sectors, the government would not collect around R$ 8 billion a year, and would therefore need to find another way to compensate for this loss.

In this context, Murilo said he believed that the decision for the exemption “increases the pressure on the Senate” for the approval of the PEC dos Precatórios – seen as essential to make fiscal space viable for the Auxílio Brasil program.

“The government saw the possibility of increasing pressure on the Senate, with the support of groups of businessmen, to approve the PEC dos Precatórios,” he said.

*with production by Bel Campos

Reference: CNN Brasil

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