Enacted on December 31, 2021, Law 14,288/21 is an important component to ensure the competitiveness of 16 sectors of the economy and vital for the maintenance of more than six million jobs.
Firm in its purpose of contributing to the construction of a more digital and less unequal Brazil, in which information technology plays a fundamental role in the democratization of knowledge and the creation of new opportunities for all, in addition to ensuring a favorable business environment innovation, ethical, dynamic and globally competitive, ABES – Brazilian Association of Software Companies celebrates the sanction of Law 14.288/21, which extends until 2023 the exemption from payroll. The new legislation meets the wishes of several companies for economic recovery and, according to experts, brings security to the country's economy.
The exemption has been in effect since 2011, and was created to replace the basis for calculating the employer's contribution to Social Security, which changed from 20% on employees' payroll to a rate of 1% to 4.5% on the company's gross revenue. . “Approval of the extension of the social security contribution on gross revenue, widely known as exemption, is an important component to ensure the competitiveness of the Brazilian technology sector, as well as for the other 16 impact sectors, and vital for the maintenance of more than six million jobs, at a difficult time for society in general”, highlights Rodolfo Fücher, president of ABES.
Currently, payroll tax relief benefits 17 strategic sectors of the Brazilian economy that intensively require labor – among them, information technology. Many companies use this benefit and, in the current scenario of economic recovery, the extinction of this measure could be an obstacle to the maintenance and generation of new jobs. “Formal employment in Brazil entails a very high tax burden. The payroll tax exemption not only guarantees millions of jobs, but also enables Brazilian companies to retain talent. Therefore, we celebrate the approval of the Law, and we thank the decisive participation of Deputies Efraim Filho and Jerônimo Goergen throughout the process”, says Fücher.
The importance of the technology sector for competitiveness is highlighted in several studies, such as The AI Frontier: Modeling The Impact Of AI On The World Economy prepared by Mckinsey, artificial intelligence is expected to generate a turnover of more than US＄ 13 trillion in the world until 2030. The same study points out that leading companies in AI should have a competitive gain in the order of 25% regarding market opportunities in the same period. On the other hand, companies that are not yet investing in AI could significantly lose competitiveness and, consequently, market share. The study also points out that the same competitiveness gap should occur between countries. In this sense, a similar study by PWC points out that, in 2030, practically 45% of AI opportunities should go to China, 25% to the United States and 30% to the rest of the world. In the case of Latin America, the share should be at 3%.
In practice, the exemption allows companies in the benefited sectors to opt for the Social Security Contribution on Gross Revenue (CPRB), at rates ranging from 1% to 4.5%, instead of paying the Social Security Contribution on the payroll, which rate is 20%.
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