The decision of the National Congress to overthrow the Government Decree that increased the Financial Operations Tax (IOF) aggravates the fiscal crisis and worsens the political situation between executive and parliament, with leaders even speaking in breaking with the Planalto Palace.
The Ministry of Finance calculated a revenue of $ 10 billion this year with the measure and double this next year. For 2025, a revenue needed to avoid even greater freezing in spending, today at R $ 31.3 billion.
For 2025, the overthrow of the IOF without compensation compromises the search for the target of public accounts, a surplus of R $ 30 billion. About a third of this clearance would be obtained with the IOF.
The project that overthrow the Executive Branch measure was approved by a large margin in the House, with 383 favorable votes and 98 against. Already in the Senate the vote was symbolic, without the nominal registration of the votes.
The vote was supported by parties that until then were majority of votes in favor of the Planalto, such as MDB and PSD. Leaders Antonio Brito (PSD-BA) and Isnaldo Bulhões (MDB-AL), even though they were in a ruling profile, guided their parties to overthrow the measure.
The Minister of Institutional Relations, Gleisi Hoffmann, went to Brito on Wednesday before the vote, but he stressed that the party would work against.
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Parliamentarians say that breakup is not definitive, but the government will need to work to rebuild the relationship with Congress.
Congress members alongside discussions say a series of reasons have caused Motta and Alcolumbre to hire this defeat to the government in the midst of a traditionally emptied week over the June festivities.
The pace that parliamentarians consider slow in release of amendments is one of the causes pointed out, but congress members also say that IOF increase would have resistance anyway because the Legislature has reached exhaustion in the government’s strategy to try to improve public accounts via increased collection.
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Among the reasons pointed out are also the complaints about a series of statements by Finance Minister Fernando Haddad. Yesterday, Haddad criticized Congress in an interview with TV Record, on the eve of the vote, and assessed that parliamentarians do not want to cut spending while voting a bill that increases the number of deputies.
Haddad also said in an event with entrepreneurs a few weeks ago that former mayor Arthur Lira (PP-AL) gave better treatment to the government’s economic agendas. The comparison, although implicit, made Motta bothered, according to deputies.
Other reasons for Congress Rusgs with the minister are the discourse that he has adopted that the Legislature is concerned with meeting “coverage”, in reference to what would be a focus of parliamentarians in the rich instead of the poorest population.
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“Haddad is part. Amendments, unfulfilled commitments, stigmatizing discourses (are also part),” says PDT leader in the House, Mario Heringer (MG).
An ally leader of Hugo Motta’s ally has a similar assessment and says that the crisis with the government exists throughout the “whole work” and not by an isolated specific event.
It also contributed to the crisis the wear and tear suffered by Congress by having overthrew vetoes made by the government in the law regulating installation of high -sea wind equipment (offshore). In practice, the legislature’s decision should increase the electricity bill.
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A part of the PT evaluates that there is no space for dialogue with the center parties and preaches a distance.
Government base leaders in both the House and Senate, they saw in Motta’s gesture and also alcohubre as a way of showing that there is no relationship with the government. The presidents of the Chamber and the Senate gathered before the matter was placed on the agenda and agreed to make this coordinated reaction.
On the other hand, deputies close to the mayor and also the government minimize the content of the crisis and evaluate that the overthrow of the decree is natural and already programmed.
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“It was expected to be guided at any time, since it approved the urgency,” said MDB leader Isnaldo Bulhões (AL).
Republican leader Gilberto Abramo (MG) followed the same line:
“Parliament has long been giving signs of dissatisfaction with tax increases. It was a matter of days.”
The twists around the IOF have already yielded three different decrees on the subject. The first was published on May 22 and raised the rate of various operations. On the same day, the government retreated only in taxation of shipments from Brazilian funds abroad. After a negative reaction of market and parliamentary sectors, the government published a decree “recalibrating” the values of IOF.
Parallel to this, the government has published a Provisional Measure (MP) with compensation measures to IOF changes. This regulation is valid for 120 days and only loses its effect during this period if it is returned by the President of Congress, Senator Davi Alcolumbre.
MP’s rapporteur is Deputy Carlos Zarattini (PT-SP). Within the MP, the most resistance points concern taxation in 5% income tax in a series of financial investments that are now exempt from taxes, such as the agribusiness letter of credit (LCA) and Real Estate Credit (LCI).
