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Business Entities Criticize MP 1202/2023 For Increasing Employment Costs, Harming National Competitiveness And Affecting The Productive Sector.
The re-burdening of the payroll, proposed by provisional measure 1202/2023, brings significant impacts to the Brazilian economy. The initiative raises concerns for various sectors, resulting in an increase in employment costs in the country, harming the competitiveness of products and services in both the domestic market and the international arena. Business entities from agriculture, commerce, industry, services, and transportation express dissatisfaction with the MP, pointing out the challenges that the re-burdening of the payroll imposes on formal employment and the private sector in Brazil.
The increase in taxation through the re-burdening of the payroll results in a higher tax burden for companies, directly affecting the competitiveness of Brazilian products. Business entities express concern about the impacts of this measure, which tends to hinder job generation and the maintenance of jobs in the country. MP 1202/2023 is also seen as an obstacle to economic recovery and sustainable development, highlighting the need for a review of tax policies to improve the business environment in Brazil.
Re-Burdening Of The Payroll: Concern Of The Productive Sector
In a statement, the Confederation of Agriculture and Livestock of Brazil (CNA), National Confederation of Commerce of Goods, Services and Tourism (CNC), National Confederation of Industry (CNI), and National Confederation of Transport (CNT) express dissatisfaction with MP 1202. The measure re-burdens the payroll of 17 sectors of the economy, limits the use of tax credits arising from final judicial decisions for the payment of federal taxes, and revises the Emergency Program for the Recovery of the Events Sector (Perse).
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The Increase In Taxation Harms Competitiveness
The president of CNI, Ricardo Alban, reminds that in the past, there was always a focus on job preservation. ‘It’s obvious that the re-burdening of the payroll will result in increased caution among employers. When any sector of the economy faces an increase of 20% in its burdens, what will it do? The first step is to stop investing and then cut back to understand the impact that this new and unexpected cost will have on its 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 from international e-commerce, which does not pay the same taxes as the national productive sector. The MP is considered misguided for increasing the tax burden on the productive sector, the main generator of wealth and jobs that lead to sustainable economic and social development.
Measures Increasing Tax Burden
The productive sector, represented by business entities from agriculture, commerce, industry, services, and transportation, received with surprise and discontent the announced measures increasing taxation at the end of 2023 and the manner in which they were implemented, through 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 the adjustment of public accounts to enable sustained economic growth. However, what we have observed is an increase in public sector expenses, and the pursuit of fiscal balance accompanied by continually rising revenue. The burden of the adjustment cannot fall solely on the productive sector. The public sector needs to contribute by reducing and making its expenditures more efficient. We hope that the government itself reconsiders the submission of MP 1202. And if that is not the understanding, we hope that the president of the National Congress can return the MP.
Source: Portal da Indústria
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