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Pacheco denies fiscal affront or irresponsibility in the decision to exempt municipalities

The President of the Senate reiterates that, in his opinion, the issue should be dealt with in a bill and not in a provisional measure

BRASILIA – The president of Senate, Rodrigo Pacheco (PSD-MG), declared on Tuesday 2 that “there is no need for reaction” on the part of the Ministry of Finance on his decision to overturn the paycheck reimbursement of the Municipalities and “no justification for this”.

The Minister of Finance, Fernando Haddadsaid Tuesday morning that he had not been advised by the Senate President that the specific section on the burden of municipalities would not be extended along with the rest of the interim measure (MP).

Pacheco’s decision, made on Monday 1, caused an uproar in the government, which said it had not been informed of Pacheco’s decision.

“I didn’t see the reaction [da Fazenda]. I had meetings all day today, but there’s no need for reaction or justification for this. The unconstitutionality of the congressman’s deconstitution of the payroll tax exemption was clear and we were looking for ways to remedy it,” Pacheco said.

Despite this, the President of the Senate stated that there is a “good alignment with the government” and that this impasse which provides for the exemption of the Municipalities “doesn’t undermine the relationship we have established in 2023?

“All projects [da equipe econômica] They were very well received in both the House and the Senate and we approved them aware of their importance for Brazil and for public finances,” he said.

Pacheco said there is “no type of snub or fiscal irresponsibility” in his decision. He reiterated what he had already explained in his order on Monday, namely that an interim measure overturning a recent congressional decision would be unconstitutional and, therefore, would not be accepted.

The President of the Senate stated that “there is an obligation on our part to avoid legal uncertainty”, since from Monday 1st municipalities will be subject to a higher rate of social security contributions. He stated that it is “legitimate” for the government to deal with the issue, as long as it is through a bill, and not with a provisional provision. “We are open to discussing a new model of tax relief, both for sectors and for municipalities,” he said.


Pacheco also said that the exemption for municipalities and the new Perse model (Emergency Program for the Recovery of the Events Sector) could already be voted on by Congress at this point if they were presented via a bill, instead of a provisional measure.

According to the Senate President, the government’s option for the MP meant that the format of the elaboration had to be discussed until now, wasting time that could have been spent voting on the proposal. “This new model has been discussed for some time, we need to move forward in order to resolve both the tax relief and the Perse”, he stated.

Pacheco believes that, as in the case of the exemption of municipalities, there is also “legal uncertainty” in the collection of taxes in the events sector, from which Perse benefits.

“The Perse issue, even if it is the subject of a provisional measure, it is clear that it will not be in parliament. It is necessary to accelerate the discussion through a bill, so that we can develop this reasoning together with the Ministry of the Treasury and the Ministry of the events sector to reach a common denominator as quickly as possible,” he explained.

Source: Terra

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