Uncertainty persists over payroll tax
The project went through several stages throughout 2023. At one point, it was approved by the National Congress. However, the initiative was vetoed by President Lula da Silva towards the end of November.
In contrast, on December 14th, the decision of the national executive was reversed, and the National Congress extended the scope of the project for another four years. Once again, Law No. 14,784 was repealed through a Provisional Measure published in the Official Gazette.
In practice, 20% of the payroll payment that companies must make is replaced by 1% to 4.5% of gross income, affecting 17 labor-intensive sectors.
For the footwear industry, the continuation of the veto would result in an additional burden of over 720 million reais annually, the loss of more than 20 thousand jobs, and over 150 million pairs of shoes left unproduced in the first year alone, as reported by the executive president of ABICALÇADOS at the time.