In the document, the sectorial entities observe that the payroll exemption was structuring for the ICT sector and that “during the period of validity of the measure, between 2010 and 2014, the sector hired 76,000 highly specialized professionals, formalizing links and reaching a total of 874 thousand workers. The remuneration in the period grew at a rate higher than the revenue itself”. They also highlight that “the social security tax would represent a serious blow to one of the most transversal sectors in the economy, a driver of innovation and productivity, a critical factor for the recovery of Brazil's competitiveness. Replacing the 4.5% rate on gross revenue with a 20% tax on payroll represents a cost shock to companies that will hardly be absorbed by the market. This situation takes on dramatic contours in light of the fact that the ICT professional has a remuneration 51% higher than the national average”. The entities claim that "in view of the above, in order not to compromise the future of Brazil in terms of innovation and information and communication technology, we renewed the request to maintain the IT sector's payroll tax exemption policy (CPRB) in a manner to maintain the optionality, under the terms of Law No. 13,161/15”.
See the full letter below:
Brasília/DF, August 8, 2017.
To the most excellent Lord
MICHEL MIGUEL ELIAS FEAR LULIA
President
Praça dos Três Poderes, Planalto Palace, 3rd Floor
Brasilia DF
Subject: Payroll Reinstatement.
Mr. President,
1. The Brazilian Association of Software Companies – ABES, the Federation of Associations of Brazilian Information Technology Companies – ASSESPRO NACIONAL and the National Federation of Information Technology Companies – FENAINFO, come before Your Excellency to express their opinion on the importance of maintaining the companies in the information technology (IT) sector in the payroll tax exemption policy under the new bill on the subject to be forwarded to the National Congress in the coming days.
2. The original text of Provisional Measure 774, of March 30, 2017, which "Provides for social security contribution on gross revenue", was forwarded to the National Congress in terms that removed the information technology sector from the social security contribution policy on gross revenue, as well as most of the sectors benefited today.
3. The experience of the IT sector with the exemption of payroll is emblematic of how positive the effects of public policies aimed at reducing the burden on labor costs can be. During the period of validity of the measure, between 2010 and 2014, the sector hired 76 thousand highly specialized professionals, formalizing contracts and reaching a total of 874 thousand workers. Remuneration in the period grew at a rate higher than its own revenue. From 2015, until the end of 2016, the sector returned 49 thousand workers to the market, around 64% of what it had built in four years.
4. The numbers show that the exemption from the cost of labor was structuring for the ICT sector, which was the pioneer in the policy given its characteristics, such as, for example, the high educational longevity and the high average wages of its workers. The tax exemption promoted a virtuous cycle in the segment, reducing informality, especially given the mandatory payment on gross revenue introduced in the first phase of the policy.
5. In this way, the social security tax would represent a serious blow to one of the most transversal sectors in the economy, a driver of innovation and productivity, a critical factor for the recovery of competitiveness in Brazil. Replacing the 4.5% rate on gross revenue with a 20% tax on payroll represents a cost shock to companies that will hardly be absorbed by the market. This situation takes on dramatic contours in light of the fact that ICT professionals are paid 51% higher than the national average.
6. It should be noted that, in view of this reality, federal deputies and senators who are members of the Mixed Commission for the analysis of MPV 774/2017 in the National Congress, modified its original text to maintain the system for collecting the employer's social security contribution under gross revenue (CPRB) on an optional basis, that is, the company can opt for payment based on gross revenue (the rate of 4.5%) or on the payroll (the rate of 20%).
7. In view of the above, in order not to compromise the future of Brazil in terms of innovation and information and communication technology, we renew the request that Your Excellency maintain the payroll tax exemption policy (CPRB) in the IT sector in order to maintain the option, pursuant to Law No. 13,161/15.
8. Certain that we can count on Your Excellency's support for the defense of the Brazilian Information Technology sector, we say goodbye with sincere wishes of appreciation and admiration.
Respectfully,
Francisco Camargo
ABES – Brazilian Association of Software Companies
Jeovani Ferreira Salomão
Assespro Nacional – Federation of Associations of Brazilian Information Technology Companies
Edgar Serrano
Fenainfo – National Federation of Computer Companies
EN 
PT 
