Finance Minister Fernando Haddad ruled out asking the Supreme Federal Court (STF) for a new extension of the agreement to approve measures that gradually re-tax the payroll until 2027. “The government is at the limit of its responsibility,” said the minister, upon returning from a meeting with the president of the Chamber of Deputies, Arthur Lira.
This Wednesday (11), the deadline imposed by the Supreme Court so that the government and Congress can reach an agreement on revenue collection measures that will offset R$55 billion from the extension of the payroll tax exemption until 2027 (R$26 billion for 2025). If the Chamber of Deputies does not approve the bill by the end of this Wednesday, the payroll for 17 sectors of the economy and for small municipalities will be fully re-taxed starting this Thursday (12).
The vote is scheduled to begin at 8 p.m., but a last-minute impasse threatens the agreement. The Central Bank issued a technical note recommending that the approximately R$8.5 billion vforgotten values by account holders in financial institutions are not included in the project. The text approved by the Senate at the end of August foresees that the money left aside by investors will increase the accounts of the National Treasury.
Due to the impasse, Haddad met with Lira this afternoon at the official residence of the Speaker of the Chamber of Deputies. According to the minister, a drafting amendment could prevent the bill from returning to the Senate and losing its validity. This is because this type of amendment does not change the merit of the text.
“We are trying to find a way to make the Senate’s purpose clear in the wording. But for that, we have to work a little bit now,” said Haddad upon returning from the meeting with Lira.
Accounting
The Central Bank and the Ministry of Finance disagree on how to account for forgotten amounts. For the Central Bank, transferring forgotten amounts to the Treasury does not represent a fiscal effort because it does not result in savings of government resources, but rather of money from account holders. Haddad says that there are precedents that allow the inclusion of the R$8.5 billion left aside in the financial system in the fiscal target of a zero primary deficit for 2024.
“I took Ceron [secretário do Tesouro Nacional, Rogério Ceron] “We are going to the meeting with Lira to explain public accounting concepts. Also to reassure him that what the Senate proposed is something that already has legal support, it is not something new,” said Haddad. “But we leave it to the Chamber to assess whether it is appropriate to support the Senate in this matter in order to comply with the decision of the Supreme Federal Court,” he said.
Haddad cited the case of the R$26.3 billion stopped in the old PIS/Pasep fund. At the end of 2022, the constitutional amendment for the transition authorized the transfer of the money to the National Treasury. The Treasury believes that the money reinforced the government’s cash flow in 2023, but the Central Bank did not recognize the amount, which led to the biggest divergence between the statistics of the two agencies in history.
TCU
In the late afternoon, Haddad appeared at the Federal Court of Auditors (TCU) to explain the conditions for meeting the zero primary deficit target for 2024. The minister admitted that he will review the revenue projections with the reintroduction of the government’s tie-breaking vote in the Administrative Council of Tax Appeals (Carf), but said that the government is able to meet the target range established by the new fiscal framework, which foresees a zero deficit with a tolerance margin of R$28.8 billion, either way.
“There are banks considering that the government will meet this year’s fiscal target, which shows that other collections made up for the revenue that did not come in with Carf,” said the minister.
At the beginning of the year, the government expected to raise R$55.6 billion with the government’s casting vote in the Carf, the administrative body of the Federal Revenue Service that judges debts of large taxpayers. However, the delay in publishing the results of the judgments led the government to reduce the forecast to R$37.7 billion in July. Now, Haddad admits that the collection could be delayed even further, with most of the resources entering the government’s coffers only in 2025.
