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Tax cut

 
PEC that limits super salaries of civil servants is approved by Congress
Proposal foresees more flexible regulation and cuts that could save R$70 billion in two years.
From the Editors
 
Friday, December 20, 2024
 
Updated at 07:35
 
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The Senate approved this Thursday, the 19th, PEC 54/24 , which brings measures to contain mandatory government expenses, including significant changes to the rules on super salaries.
 
The proposal, which foresees savings of R$70 billion in two years, will be enacted in the coming days.
 
The text now goes to the National Congress for promulgation, making the approved changes official.
 
The PEC had been voted on hours earlier in the Chamber of Deputies, after an accelerated processing process.
 
The government's original text was incorporated into another proposal on tax content ( PEC 31/07 ), dispensing with the admissibility analysis and the normal procedure for processing a PEC, which generally requires five discussion sessions before the first round of voting and three before the second round.
 
In the Senate, the matter received number 54/24 and went on for final approval.
 
Senate relaxes rules on super salaries and approves spending cuts PEC. (Image: Pedro França/Agência Senado)
Super salaries: flexibility and controversies
 
One of the most controversial points of the proposal was the change in the regulation of the salary cap, currently set at R$44,000, equivalent to the allowance of STF ministers.
 
The approved text allows exceptions to the ceiling to be defined by ordinary law, which requires fewer votes for approval than a complementary law, as initially suggested by the government.
 
The measure was widely criticized, especially by opposition leader Senator Rogério Marinho, who pointed out that the changes make it easier to maintain extras and loopholes in the ceiling.
 
The issue of super salaries here is just smoke and mirrors being thrown in the population's eyes. We are seeing, repeatedly, almost every month, examples of circumvention in this situation. Those who earn more than R$40,000 are us here in this House and the majority of the Brazilian Judiciary, who represent less than 1% of the economically active population of Brazil.
 
Another controversy is that, until there is new regulation, the current rules remain in force, including CNJ resolutions that allow extra-ceiling compensation for magistrates.
 
An attempt to prevent sub-legal norms from addressing the issue was rejected in the plenary.
 
Effort for fiscal balance
 
The approval of the PEC is part of a government strategy to contain the growth of mandatory expenses, such as payroll and social programs, and free up resources for discretionary spending.
 
The proposal’s rapporteur, Senator Marcelo Castro, highlighted the measure’s fiscal objectives.
 
We are resuming our commitment to controlling inflation and spending, which will have an impact on improving people's income.
 
PIS/Pasep salary bonus
 
One of the most significant changes involves the PIS/Pasep salary bonus. Starting in 2026, the benefit will be adjusted only for inflation (INPC), excluding real gains from the minimum wage.
 
Furthermore, by 2035, the income threshold for eligibility for the benefit will be gradually reduced to one and a half minimum wages, restricting the number of beneficiaries. According to the government, this measure is necessary to control the growing expenditure on the program.
 
Changes in Fundeb
 
In the area of ​​education, the PEC introduces important adjustments to the Basic Education Maintenance and Development Fund (Fundeb).
 
The allocation of resources to promote full-time enrollment was reduced from 20% to 10% in 2025. In the following years, a rule provides for the minimum application of 4% until the goals of the National Education Plan are achieved.
 
The Senate also excluded the possibility of using Fundeb resources for programs such as school meals and school health, arguing that these expenses already have specific sources defined in the Constitution.
 
The measure was defended as necessary to prioritize the use of the fund to expand vacancies, improve school infrastructure and pay teachers.
 
DRU extension
 
The PEC extends the DRU -  Unlinking of Federal Revenues until 2032  , allowing the government to freely use 20% of federal taxes that, in theory, would be allocated to specific funds or expenses.
 
The measure increases budgetary flexibility, but maintains the protection of resources earmarked for education and health, such as pre-salt royalties.
 
Limitation of subsidies and financial benefits
 
Finally, the proposal grants the Executive greater autonomy to limit or reduce expenditure on subsidies, grants and financial benefits, as long as they are within the limits established by the new fiscal framework.
 
The idea is to allow faster and more effective adjustments in budget management, without disregarding current fiscal targets.
 
The changes aim to balance public accounts and reduce mandatory spending, but they face criticism regarding their social impact, especially in relation to the salary bonus and the use of Fundeb resources.
 
With information from the Senate Agency.
 
link: https://www.migalhas.com.br/quentes/421967/pec-que-limita-supersalarios-de-servidores-e-aprovada-pelo-congresso
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ALESSANDRO ALVES JACOB

Mr. Alessandro Jacob speaking about Brazilian Law on "International Bar Association" conference

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