Senate to speed up analysis of payroll exemptions bill

Senate President Rodrigo Pacheco. Photo: Jefferson Rudy/SF/CC-BY 4.0
Senate President Rodrigo Pacheco. Photo: Jefferson Rudy/SF/CC-BY 4.0

Brazil’s Senate President Rodrigo Pacheco announced that the upper chamber of Congress will give priority to a bill extending payroll tax exemptions to 17 economic sectors until 2023. The current benefit is set to expire on December 31, and the favored industries are among those who employ the most people in Brazil.

Approved by the lower house’s Constitution and Justice Committee last week, the bill gives employers the option to substitute 20-percent social security contributions on payroll for a straightforward tax on gross revenue, ranging from 1 to 4.5 percent.

Among the 17 sectors to benefit from the exemption extension are roadway transport, textiles, machinery and equipment, civil construction, animal protein, and the footwear industry.

If approved, this would be the second time Congress has voted to extend the benefit. Exemptions were originally slated to end in 2020, but the deadline was pushed back until this year. The initial proposal foresaw an extension until 2026, but the draft was amended after an agreement between the government’s economic team and lawmakers.