By LAURO MATTEI*
A Folha de São Paulo celebrates “I'm still here”, while continuing with the typical behavior of the coup media by calling for a boycott of the government through arguments that do not hold up
On Sunday night (02.03.25) thousands of people took to the streets to celebrate the Oscar win for the Brazilian film “I’m Still Here,” considered by the American Film Academy to be the best international film produced in 2024. Perhaps a significant portion of these people have not even seen the film and, even worse, many of them do not even know anything about the central theme of this work of art. And, what’s more, it is quite likely that many of these people in recent years may have joined the chorus of those sociopathic groups that took to the streets to defend the return of the military dictatorship.
To a large extent, such behaviors may be linked to the method with which the mainstream media, especially those that supported the 1964 military coup, disseminate and socialize information. The highlight here is the media conglomerate Grupo Globo and also the business group Empresa Folha da Manhã (owner of Folha de São Paulo, Datafolha, Portal Uol, Pague Seguro, etc.). Although it is not the focus of this article, I would like to point out that Globo chose journalist Maria Beltrão, daughter of Hélio Beltrão, former minister of the dictatorship and signatory of AI 5 of 1968, to cover the Oscars. There is no problem with her being the daughter of this gentleman. The problem was her comments, which were full of untruths when it came to President Lula and his government.
The focus of this article is on the stance taken by Grupo Folha the day after the award won by the Brazilian film (03.03.25). In an editorial in the newspaper Folha de São Paulo, entitled “Tax benefits need to be more transparent”, presents a set of statements that need to be problematized, as we will do below.
It is stated that tax incentives should reach 4,8% of GDP in 2025, implying an amount of R$544 billion. Therefore, “it is necessary to make cuts in the expenses ignored by the Lula government” because the government only has in mind “the tax revenue potential”. This statement clearly implies what wealthy sectors of society have been defending for some time: the current government needs to cut social spending, especially in social programs such as the Continuous Cash Benefit (BPC) and Bolsa Família.
It is also stated that “the incentives lack satisfactory evaluation” and that “the efficiency, costs and advantages of each of them need to be discussed”, highlighting the existence of “black boxes, such as the Manaus Free Trade Zone and SIMPLES”. In fact, there are dozens of evaluations of the tax incentive program that has been underway in the country since 2012. The problem is that most of these evaluations go in the opposite direction to what the FSP editorial advocates. Let’s look at some data extracted from a study I recently published on the subject.[I].
It should be remembered that these tax incentives known as the “payroll tax relief program” were intended to stimulate job creation in the country. In short, most studies conducted on the results of this program have revealed that the narrative of the business sectors that has recently gained traction does not hold up when analyzing the long-term trajectory of the program, since the main beneficiary sectors are not the largest job creators in Brazil.
Furthermore, data from the Annual Report of Social Information (RAIS-MTE), relating to the entire period of this policy that came into effect from 01.01.2012, reveal a scenario that is completely opposite to the lobby that has formed in the National Congress in recent years in relation to the matter.[ii].
We present a summary table of the program in terms of job creation. Regarding the first period (2011-2014), it can be seen that in absolute terms there was an expansion of 174.942 jobs, with eight sectors reducing their employment levels, while another nine expanded. Even so, the percentage of participation of the exempted sectors in the country's total fell from 16,5% (2011) to 15,8% (2014). It is worth noting that this was a period of significant job growth, since at the end of President Dilma's first term the country reached one of its lowest unemployment rates.
Jobs generated by the 17 sectors with payroll tax relief between 2012 and 2021, according to RAIS/MTE
In the period 2014-2021, there was a reduction of 873.943 jobs in relation to the amount existing in 2014. As a result, the percentage of participation of these sectors in the country's employment fell to 14,3%, continuing what was observed in the previous period. In sectoral terms, it is noted that 12 sectors suffered reductions, while only 5 increased their employment levels.
Analyzing the entire period of validity of the payroll tax relief policy, in light of the data made available by RAIS, it can be seen that the percentage of participation of these 17 sectors in the total employment generated in the country fell from 16,5% (2011) to 14,3% (2021). In absolute terms, it can be seen that over the time series considered there was a reduction of 699.022 jobs, with only six of the 17 tax-exempt sectors increasing their employment levels in 2021, compared to 2011.
In summary, this movement in the labor market of these seventeen sectors can be summarized as follows: in only three sectors (road freight transport, IT and call center) there was a significant expansion of jobs, while in another five sectors (civil construction, construction and infrastructure works, clothing and apparel, public road transport and vehicle body manufacturing) there was a significant reduction in the volume of employment in 2021 compared to the level existing in 2011. The other sectors remained practically at the same level throughout the entire period of validity of the program.
“As the Lula government does not seriously engage in the political debate and does nothing to combat these tax incentives, it is difficult to obtain support from public opinion.”
Here we can see an attempt to blame the current government as a way of hiding the true interests involved in the matter. Let's see: on May 30.05.2018, 13.670, Law 31.12.2020 was enacted, extending the policy that was in effect until December 31.12.2023, XNUMX, and from that date onwards, all sectors would have to return to contributing in full to the Social Security rate. This policy did not undergo any changes during the Bolsonaro government, which made successive extensions of this benefit, including extending it beyond the end of his term, that is, until December XNUMX, XNUMX.
In anticipation of the end of the payroll tax relief policy scheduled to occur on December 31.12.2023, 2023, leaders of the benefited business sectors resumed their lobbying with deputies and senators in mid-2023. From then on, Senator Efraim Filho (União Brasil-PB) presented, in July 334, the Bill (PL 23/31.12.2027) proposing the extension of the exemptions in effect on that date until December 01.08.23, 2023. And as of August XNUMX, XNUMX, with unprecedented speed, the aforementioned bill began to be processed by all CN committees always under an urgent regime. As a result, it was approved in August XNUMX.
Sent for presidential sanction, this bill was vetoed in its entirety by President Lula on November 23.11.2023, 14.12.2023. According to the Presidency of the Republic, the government considered the bill unconstitutional because it did not present the financial impacts of the tax waiver (payroll tax relief for the companies covered). As a result, the matter returned to the National Congress to analyze the presidential vetoes. In meetings held on December 14.784, 28.12.2023, both in the Senate of the Republic and in the Chamber of Deputies, all of the President's vetoes were overturned by a large majority in both houses of parliament. From then on, the matter became Ordinary Law No. XNUMX, published in the Official Gazette of the Union on December XNUMX, XNUMX.
The government's reaction was immediate. On December 29.12.2023, 1202, a Provisional Measure (MP 23/1202) was launched with the aim of reducing revenue losses and, thus, achieving the goal of a zero deficit in public accounts. To this end, the MP changed the tax relief rules that had been approved by the CN, with emphasis on: a) MP 2024 proposed that, as of April 90, a lower tax rate would be in effect only for one minimum wage per worker. It should be noted that, although the MP comes into effect immediately after being issued, some proposed changes would only come into effect 2021 days after its publication; b) The review of the Emergency Program for the Recovery of the Events Sector (PERSE) created in 2023 to help this sector with full tax relief during the pandemic, and this program was supposed to last only two years. However, in mid-2025 the CN extended this policy until the end of XNUMX.
In view of the negative political repercussions from segments of the CN, the government issued a new measure (MP 1208/24) on February 28.02.2024, 17 revoking the re-taxation of the 1202 sectors provided for by MP 23/14.784. As a result, these sectors were once again exempted from taxes as approved by Law 23/XNUMX. This decision to backtrack by the government was the result of agreements reached with political leaders of the CN, who imposed their forces on the government, making it almost hostage to the interests of these segments, mostly identified with the conservative-based political forces that currently dominate the CN.
Reducing this capture of resources requires political leadership with clarity of purpose, an attribute lacking in today's Federal Government.
The final part of the editorial is a call for an explicit boycott of the current government, including arguments that are not sustainable, as we have shown previously. This behavior is typical of the coup-supporting media, examples of which have been extensive since the 2016 parliamentary coup.
Therefore, and differently from the coup premise of the editorial of Folha de São Paulo, we are categorical in stating that the current payroll tax relief policy has not fulfilled its central objectives (expanding employment and wages, increasing the economy's competitiveness and improving its international insertion) and, in essence, has ended up becoming yet another perverse mechanism for expanding inequality in a country historically marked by extreme social inequalities, since it transfers income from society as a whole to a small group of privileged sectors.
* Laura Mattei He is a professor at the Department of Economics and International Relations and at the postgraduate program in Business Administration, both at UFSC..
Note
[I] For more details, see: Payroll tax relief in Brazil: a policy to transfer income to privileged economic sectors. RBEST-Unicamp Journal. https://doi.org/10.20396/rbest.v6i00.18750
[ii] Currently, 17 economic sectors benefit from the tax incentive policy aimed at generating employment.
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