English 
Spanish 
3 min read
0 comments
Business entities criticize MP 1202/2023 for increasing employment costs, harming the country's competitiveness and affecting the productive sector.
The re-encumbrance of the payroll, proposed by provisional measure 1202/2023, brings significant impacts to the Brazilian economy. The initiative raises concerns for several sectors, resulting in an increase in employment costs in the country, damaging the competitiveness of products and services both in the national market and on the international stage. Business entities in agriculture, commerce, industry, services and transport express their dissatisfaction with the MP, pointing out the challenges that the increase in the payroll imposes for formal employment and private in Brazil.
The increase in taxation through payroll tax increases results in an increase in the tax burden for companies, directly affecting the competitiveness of Brazilian products. Business entities express concern about the impacts of this measure, which tends to make it difficult to create jobs and maintain jobs in the country. MP 1202/2023 is also seen as an obstacle to economic recovery and sustainable development, highlighting the need to review tax policies to improve the business environment in Brazil.
Payroll repayment: concern of the productive sector
In a note, the Brazilian Confederation of Agriculture and Livestock (CNA), National Confederation of Commerce of Goods, Services and Tourism (CNC), National Confederation of Industry (CNI) and National Confederation of Transport (CNT) express their dissatisfaction with the MP 1202. The measure reburdens the payroll of 17 sectors of the economy, limits the use of tax credits arising from final court decisions for the payment of federal taxes and revises the Events Sector Emergency Resumption Program (Perse).
- Nuclear fusion has found the miracle it needed on the road to commercial power plants
- Brazilian Army closes mega-deal with the US and acquires state-of-the-art metal bridge structures to reinforce military logistics and revolutionize strategic operations in the country!
- Japan has discovered enough cobalt and nickel reserves to meet its mining needs for the next 90 years, and the most incredible thing is where they are located
- New largest lithium reserve on the planet discovered!? With 30 million tons, historic find could redefine markets and make mining history
Increased taxation harms competitiveness
The president of the CNI, Ricardo Alban, recalls that, in the past, the preservation of employment was always preached. ‘It is obvious that the re-encumbrance of the payroll will result in increased prudence on the part of those who hire. When any sector of the economy starts to have 20% more in its charges, what will it do? The first step is to stop investing and then downsize until you understand the impact that this new and unexpected cost will have on your performance, because the sector will lose competitiveness’, says the businessman.
Impact of MP 1202/2023 on imports and the productive sector
According to the Confederations, MP 1202 further harms the competitiveness of industry and commerce, which face unequal competition with imports, especially with international electronic commerce, which does not pay the same taxes paid by the national productive sector. The MP is considered mistaken in increasing the tax burden on the productive sector, the main generator of wealth and jobs that lead to economic development and socially sustainable.
Measures to increase tax burden
The productive sector, represented by business entities in agriculture, commerce, industry, services and transport, received with surprise and nonconformity the measures to increase taxation announced at the end of 2023 and the way in which they were implemented, through the MP 1202, without prior dialogue with the entities and in opposition to positions recently taken by the National Congress.
Fiscal balance and economic development
The productive sector understands the importance of seeking to adjust public accounts so that the economy can grow in a sustained manner. However, what we have observed is the increase in public sector expenses and the search for fiscal balance with the continuous increase in revenue. The burden of adjustment cannot fall solely on the productive sector. The public sector needs to make its contribution, reducing and making its spending more efficient. We hope that the government itself will reconsider sending MP 1202. And, if this is not the understanding, that the president of the National Congress can return the MP.
Source: Industry Portal
