The Lula government (PT) wants to find a solution to the impasse with municipalities over the re-taxation of payroll in less than a month. The goal is to resolve the issue by May 20, when the Mayor's March will begin in Brasilia.
While one faction of the government proposes a progression of municipal pension contributions according to revenue, the economic team has advocated maintaining the re-taxation and offering in return a renegotiation of municipalities' debts with the Union.
This proposal reportedly came from the president of the National Confederation of Municipalities (CNM), Paulo Roberto Ziulkoski, and has the sympathy of the Treasury. But other associations have presented counterproposals.
The gesture to the mayors would also serve to ease the political atmosphere in an election year.
Allies of the president, proponents of a political solution to the impasse, however, will face difficulties in the National Congress. The attempt to negotiate with mayors and also with Congress will occur in parallel with a new focus of tension between the branches of government.
The Attorney General's Office (AGU) filed a lawsuit on Wednesday (24) with the Supreme Federal Court (STF) to suspend sections of the law passed by Congress that extended until 2027 the tax relief on payroll for municipalities and 17 sectors of the economy. The request was accepted monocratically by Minister Cristiano Zanin, with immediate effect.
The move to involve the judiciary displeased mayors, who rely on the reduction in the rate to have more money in their coffers, especially in an election year. It also angered lawmakers, who saw the measure as interference in legislative decisions.