Abrasca attacks government for limiting tax compensation: “compulsory loan”

The Brazilian Association of Public Companies (Abrasca), which brings together more than 440 companies and represents 88% of the market value of companies listed on B3, published, this Thursday (12), a note harshly criticizing the complementary bill (PL 210/2024) which establishes the so-called “sustainable tax regime” and, among other measures, limits compensation of tax credits to companies.
The proposal was filed two weeks ago by José Guimarães (PT-CE), government leader in the Chamber of Deputies, and is one of the economic team’s bets to balance public accounts amid financial market skepticism. According to the text, the federal government would be authorized to imitate the use of tax credits in the event of a primary deficit – even in cases in which the taxpayer unduly collected a tax.
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In Abrasca’s assessment, the project recovers points from Provisional Measure nº 1227/2024, which was returned by the National Congress to the Executive Branch after a barrage of criticism from the productive sector. “The package should focus on cutting spending and not on measures to increase revenue, with a trigger embodied in the increase in Government spending (deficit)”, says the note to which the InfoMoney had access.
“The limitation on the offset of tax credits needs to be removed from the text, as it violates the basic principles of legal certainty and predictability, in addition to morality and contributory capacity, repeating the serious error of MP 1227/2024, nicknamed ‘MP of End of the World’, which, in the part in which it instituted a similar (and less comprehensive) measure, was promptly returned by the National Congress”, he continues.
In the institution’s assessment, the approval of such a proposal “would result in an indirect increase in the tax burden” − which could cause serious problems for companies in a context of monetary tightening. “This is, once again, a disguised compulsory loan”, criticizes the association in the note.
According to the proposal in progress, the limit for the use of tax credits will be monthly and differentiated according to the size of the compensation. Credits of up to R$10 million will not be affected and a minimum payment of 1/60 of the total credit amount is guaranteed in each monthly installment. In the event of a deficit, the text also prohibits the granting, expansion or extension of tax incentives and the increase in personnel expenses above the lower limit of the framework; that is, 0.6% above inflation.
These two restrictions will also come into force if, from 2026 onwards, it is determined that non-mandatory expenses have suffered a nominal reduction from one year to the next, that is, without considering the variation in inflation. The restrictions would remain in place until discretionary expenses returned to growth.
The project also authorizes the Executive to block and contingency parliamentary amendments up to the same proportion applied to other discretionary expenses, both limited to 15% of the value. Complementary Law 210/24, recently sanctioned, had established the contingency, but not the blockade.
Contingency occurs when there is a risk of not meeting the fiscal target for the year due to a drop in revenue. Blocking occurs when it is necessary to meet the expense limit.
The proposal also makes the application of the financial surplus of the following funds free: Fund for the Defense of Diffuse Rights, National Anti-Drug Fund, Merchant Marine Fund, National Civil Aviation Fund, National Traffic Safety and Education Fund, Army Fund, Fund Aeronautical and Naval Fund. This is an initiative that has been discussed for some time among technicians from the economic team.
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In the note that the InfoMoney had first-hand access, Abrasca asks parliamentarians to remove two sections from the text that deal precisely with the limit for offsetting tax credits. For the institution, the government made more progress than the MPV attempt itself, which ended up being returned by the Legislative Branch, going further than PIS/COFINS credits.
“There is no room for such interference in the cash flow of companies, which, like the government, need a minimum of predictability in their cash flow”, he argues.
“The scope of such a change in compensation rules, in addition to violating the principles already mentioned, implies an indirect increase in the tax burden. If the taxpayer has no debts to pay and the credit cannot be used, for example, this amount would become a cost in the operation. There will, therefore, be a continuous accumulation of credit, without the real possibility of its use, a fact that compromises the neutrality of the system. We therefore see a disproportionate impact on the financial health of companies, with the risk of passing on costs to consumers”, he claims.
“In practice, the government would be benefiting if it is not fiscally responsible, at the expense of taxpayers. It is penalizing the taxpayer for the government’s failure to review its accounts”, he concludes.
(with Agência Câmara)