ABES and the entities representing the 17 sectors that employ the most in the country came together in an essential request to maintain and generate even more jobs: the sanction of PL 334/2023. Emphasizing one of the main banners of President Lula's political trajectory, these entities sent a craft in order to reinforce the need for sanction so that the sectors can continue to contribute significantly to Brazil's growth and the well-being of the Brazilian population. All entities involved reinforce the need to sanction Bill 334/2023 in favor of a policy that brought significant results to the country's economy by reducing labor costs and providing greater dynamism to companies.
After receiving the letter, the Personal Office of the President of the Republic responded to the letter, on 11/14, and reported that the document “was sent to the Secretariat of Institutional Relations of the Presidency of the Republic, through Official Letter No. 4527/2023/DGI/GAGI/GPPR” and announced that “request for a hearing was forwarded to the Deputy Agenda Office of the Personal Office of the President of the Republic, via Dispatch, for analysis“.
On November 9th, a manifesto from Central Unions and Unions was also published in the newspaper O Globo, showing concern if the PL is not approved, remembering that, without the exemption, companies that export products will have high costs and will lose competitiveness in the international market.
The text of craft of the entities highlights:
“The signatory entities, representatives of labor-intensive sectors covered by the Social Security Contribution on Gross Revenue (CPRB), come, through this file, petition your Excellency. the sanction of the extension of payroll tax relief for the 17 sectors, contained in Bill No. 334/2023.
The aforementioned legislative proposal was approved with broad support from the National Congress at the end of October this year, being sent for presidential sanction. Since the payroll tax exemption is a structuring public policy for the dynamism of the labor market and with a direct relationship with job creation, one of the main banners of your political trajectory, we are confident in counting on your favorable decision. in favor of this measure.
For the reasons that we respectfully explain below, due to the tight legal deadline for extending the CPRB, it is of great importance that you. sanction the text, approving the measure with regard to economic activities.
As Your Excellency is aware, the worthy CPRB model was established under President Dilma's Government by Law No. 12,546/2011, replacing the 20% of the employer's contribution to Social Security, levied on the payroll. Currently, this measure is fundamental to the preservation of sectors whose productive structures cover 9.24 million direct formal jobs, to which are added millions of other jobs in their production networks.
The positive results of this payroll tax relief policy can be seen from official CAGED data. Comparing the realities from 2018 to 2022, it is observed that the sectors that remained with the exempt sheet had a job growth of around 15.5%, while those who had the reencumbered leaf grew by just 6.8% in the same period. We would like to present you these and other numbers, such as the greater growth in wages for workers in these exempt sectors vis a vis to the others.
Given this scenario and the end of the upcoming year, in which the CPRB model is expected to be extinguished, it is necessary to guarantee its extension. Another element that strengthens the urgency of presidential sanction and avoiding new discussions in Congress about a possible veto, refers to the company planning, who need to evaluate their possibilities in light of expected costs and take the necessary actions. It is important signaling for future business decisions, which should help save thousands of jobs.
Maintaining these jobs translates into continued payment of salaries, consumption capacity and even investment. All of this brings returns to the State's cash flow (IRPF, employee INSS, consumption taxes, among others) and lower economic costs (such as unemployment insurance, for example) and social costs. Added to this are the revenues from the additional 1% from Cofins-importation, allowing the final equation for the State to be excellent cost-benefit.. This strategic public policy does not lead to a tax waiver, and yes, in the end, to an effective increase in revenue by the State, as our studies demonstrate.
This is, therefore, a crucial initiative aimed at preserving jobs and a timely solution until linear tax relief for all sectors is approved, which could occur in a future stage of the Tax Reform. Meanwhile, Your Excellency's Government. cannot allow this model to go away and for us to have disastrous effects on unemployment and even an increase in inflation and interest rates, which ends up harming the general population.
The signatory entities are:
Abes – Brazilian Association of Software Companies
Abert – Brazilian Association of Radio and Television Broadcasters
Abicalçados – Brazilian Association of Footwear Industries
Abimaq – Brazilian Association of the Machinery and Equipment Industry
Abit – Brazilian Association of the Textile and Clothing Industry
ABPA – Brazilian Animal Protein Association
Abratel – Brazilian Radio and Television Association
ABT – Brazilian Teleservices Association
ANJ – National Association of Newspapers
ANPTrilhos – National Association of Rail Passenger Transporters
Assespro – Federation of Associations of Brazilian Information Technology Companies
Brasscom – Association of Information and Communication Technology (ICT) and Digital Technologies Companies
CICB – Brazilian Tanning Industry Center
CNT – National Transport Confederation
Conexis Brasil Digital – National Union of Telephony and Mobile Cellular and Personal Service Companies
FABUS – National Association of Bus Manufacturers
Fenainfo – National Federation of IT Companies
Feninfra – National Federation for Installation and Maintenance of Telecommunications and IT Network Infrastructure
IGEOC – Management Institute for Operational Excellence in Billing
NTC&Logística – National Association of Cargo Transport and Logistics
NTU – National Association of Urban Transport Companies
OCB – Organization of Cooperatives of Brazil
P&D Brazil – Association of Development Companies. National Technological and Innovation
SEPRORGS – Union of Information Technology and Data Processing Companies of Rio Grande do Sul
Sinditêxtil – Union of Spinning and Weaving Industries of the State of São Paulo
Sinicon – National Union of the Heavy Construction Industry