Government withdraws 32 activities from Perse and limits benefits to municipalities; understand

After a series of comings and goings, allies of the president’s government Luiz Inácio Lula da Silva (PT) in the Chamber of Deputies, they filed, on Wednesday night (27), the bills that deal with the redesign of the Emergency Program for the Resumption of the Events Sector (Persian) and the reduction of social security contribution paid by certain municipalities.

The texts, considered fundamental by the economic team in the search for achieving the goal of fiscal balance in 2024, were presented in the legislative house after the Executive Branch gave in to pressure from parliamentarians and designed “middle ground” solutions in relation to the ideas that were originally contained provisional measure (MPV 1202/2023) issued at the end of last year.

After a frustrated attempt by the government to revoke Perse − tax benefit granted to the events and tourism sectors at the height of the Covid-19 pandemic −, the bill (PL 1026/2024) filed by deputies José Guimarães (PT-CE ) and Odair Cunha (PT-MG) reduces from 44 to 12 the segments defined by Codes of the National Classification of Economic Activities (CNAE) which will have a reduction in PIS/Pasep, Cofins, CSLL and IRPJ rates (See the specified lists at the end of the article).

The text replaced the exemption provision for 60 months (counting from May 2021, as established in the original version of the program) with a new taxation rule for the 12 remaining sectors, with the gradual resumption of the original charge.

In the case of contributions to the Social Integration and Heritage Formation Programs for Public Servants (PIS/Pasep), the Contribution to the Financing of Social Security (Cofins) and Social Contribution on Net Profit (CSLL), the project provides for a 45% rate reduction for taxable events relating to April to December 2024; 40% for 2025 and 25% for 2026.

As for Corporate Income Tax (IRPJ), the text provides for a 100% discount from January 1st to December 31st, 2024; 40% for 2025; 25% for 2026.

Another restriction introduced by the new bill was the prohibition of granting tax benefits to companies taxed on real profit (with annual revenue exceeding R$78 million) or arbitrated profit.

The bill also offers a window for taxpayers who have unduly enjoyed the benefit to adhere to self-regularization within 90 days, through confession and payment or installments of the full amount of taxes, plus interest, removing the incidence of late payment and ex officio fines in relation to debts relating to triggering events prior to March 2024.

Municipal pensions

In the provisional measure (MPV 1202/2023) that reinstated the payroll for 17 economic sectors, the federal government tried to reverse the decision taken by the National Congress to benefit certain city halls. The law enacted by parliamentarians last year reduced from 20% to 8% the rate charged for employer contributions to the National Social Security Institute (INSS) on the payroll of municipalities classified in coefficients below 4.0 in the table of income bands. inhabitants observed in the distribution of the Municipal Participation Fund (FPM) − which is equivalent to a ceiling of 156,216 inhabitants. In the understanding of the Executive Branch, the measure violates the precepts of the Fiscal Responsibility Law (LRF), as no sources of compensation were indicated for the loss of revenue caused by the changes.

Lula even vetoed the device, but the veto was overturned by congressmen. In a new offensive against the text, the Executive tried to revoke the rule through a provisional measure − causing discomfort among parliamentarians. Faced with resistance and the risk of a defeat in the Legislature, the government agreed to sit at the negotiating table and forward a bill with an intermediate solution to the issue.

The new bill (PL 1027/2024), also presented by deputies José Guimarães and Odair Cunha, provides for a reduction from 20% to 14% in the social security contribution paid by municipalities with a population of up to 50 thousand inhabitants and which present Net Current Revenue (RCL) per Capita of up to R$3,895.00. The rate rises to 16% in 2025 and 18% in 2026, returning to the original level the following year.

According to the text, municipalities with up to 50 thousand inhabitants will also be able to consolidate and pay in installments their debts with the Federal Revenue Service over up to 60 months with a 70% reduction in fines and interest, according to the payment capacity to be defined by an act of the Tax Authority itself.

See the list of activities that continue in the new Perseaccording to the bill:

1) Hotels (5510-8/01);

2) Organization services for fairs, congresses, exhibitions and parties (8230-0/01);

3) Party and event venues (8230-0/02);

4) Theatrical production (9001-9/01);

5) Music production (9001-9/02);

6) Production of dance shows (9001-9/03);

7) Production of circus, puppet and similar shows (9001-9/04);

8) Sound and lighting activities (9001-9/06);

9) Performing arts, shows and complementary activities not previously specified (9001-9/99);

10) Restaurants and similar (5611-2/01);

11) Bars and other establishments specialized in serving drinks, without
entertainment (5611-2/04);

12) Bars and other establishments specialized in serving drinks, with entertainment (5611-2/05).

See the list of activities that are left out of the new Perseaccording to the bill:

1) Aparthotels (5510-8/02);

2) Hostels, except welfare (5590-6/01);

3) Campsites (5590-6/02);

4) Pensions (accommodation) (5590-6/03);

5) Other accommodation not previously specified (5590-6/99);

6) Food services for events and receptions – buffet (5620-1/02);

7) Advertising film producer (5911-1/02);

8) Film exhibition activities (5914-6/00);

9) Creation of stands for fairs and exhibitions (7319-0/01);

10) Photography production activities, except aerial and underwater (7420-0/01);

11) Filming of parties and events (7420-0/04);

12) Agency of professionals for sporting, cultural and artistic activities (7490-1/05);

13) Rental of recreational and sports equipment (7721-7/00);

14) Rental of stages, covers and other structures for temporary use, except scaffolding (7739-0/03);

15) Reservation services and other tourism services not previously specified (7990-2/00);

16) Management of spaces for performing arts, shows and other artistic activities (9003-5/00);

17) Production and promotion of sporting events (9319-1/01);

18) Nightclubs, dance clubs, dance halls and similar (9329-8/01);

19) Passenger transport service – car rental with driver (4923-0/02);

20) Collective road transport of passengers, under charter, municipal (4929-9/01);

21) Collective road transport of passengers, under charter, intercity, interstate and international (4929-9/02);

22) Organization of excursions in own road vehicles, municipal (4929-9/03);

23) Organization of excursions in own road vehicles, intercity, interstate and international (4929-9/04);

24) Coastal maritime transport – passengers (5011-4/02);

25) Long-distance maritime transport – passengers (5012-2/02);

26) Water transport for tourist tours (5099-8/01);

27) Travel agencies (7911-2/00);

28) Tour operators (7912-1/00);

29) Museum activities and exploration of historic places and buildings and similar attractions (9102-3/01);

30) Activities of botanical gardens, zoos, national parks, ecological reserves and environmental protection areas (9103-1/00);

31) Amusement parks and theme parks (9321-2/00);

32) Activities of associative organizations linked to culture and art (9493-6/00)