RIO DE JANEIRO, BRAZIL – Chamber of Deputies president Arthur Lira (PP-AL) has said to interlocutors that the opening of an impeachment proceeding would require at least one of four conditions to move forward: an economic recession, low employment generation, lack of political support for the government, or abuse of office.
According to the legislator, none of this is currently on the table. In the last requirement, Lira concedes that there are controversies with respect to Jair Bolsonaro, but insists that for now there is no material evidence of any crime.
The wing of the economic team in charge of managing the budget was startled by the extent of the tax relief of the income tax reform. Everyone was expecting an additional loss of revenue once the draft bill reached Congress, but not the R$30 (US$5.9) billion included by the bill’s rapporteur, Deputy Celso Sabino (PSDB-PA).
Part of the surprise was because compensation included in the income tax bill had already been included in another stage of the tax reform, which deals with the unification of PIS/Cofins (federal taxes based on the turnover of companies) and also requires compensation.
Economy Minister Paulo Guedes has been warned about the risks of the reform’s impact being greater than expected, but he is so confident about the resumption of tax revenue that he is overlooking these concerns.
Ministry officials were also surprised by Bolsonaro’s announcement that the government would reduce the PIS/Cofins tax on diesel. The measure has not been discussed within the portfolio. Officials assume that Guedes promised Bolsonaro to make up for the benefit of the income tax reform.
TRYING TO UNDERSTAND
The economic team is still trying to understand why the 2021 tax collection is rising at such a strong rate. GDP rebound can explain part of this growth, but not all of it.
A possibility suggested among the Ministry’s officials is that the digitalization triggered by the pandemic in several sectors has led to a greater formalization of companies. But no one can confirm this assumption.
According to Guedes, tax collection has come in R$100 (US$20) billion higher than expected for the first half of the year and the figure may reach R$200 billion by the end of the year. The Minister believes that revenue behavior is structural, but officials favor caution.
The economic team already has a plan B to finance the new Bolsa Família (Family Grant) in the event of a setback in the income tax reform bill, which provides for the taxation of dividends to finance the social program. Faced with pressure for changes in the draft and the short window for voting, the alternative is to cut tax benefits, some of which can be eliminated by Provisional Measures issued by the President.
Minister of Mines and Energy Bento Albuquerque is so reassured that he decided to take a vacation amid the greatest water crisis in Brazil in almost 100 years. Next month is considered a critical period because ANEEL (Brazilian Electricity Regulatory Agency) is expected to readjust the red tariff flag once more and Petrobras will perform maintenance on its gas fields, which will reduce the supply of fuel for thermoelectric plants.
Sector executives are wondering if with such reassurance Bento has realized something that others have not yet noticed.
BRAZILIAN TRADITION
The current system, according to which the Chamber president is the sole decision-maker regarding the start of an impeachment process, has a long tradition in Brazil.
The internal bylaw of the Chamber of Deputies was approved on September 21, 1989, through Resolution No. 179. The Resolution provides a detailed description of the procedures regarding the functioning of the Chamber of Deputies and also includes the procedures to be followed in cases of impeachment of the President of the Republic.
Article 14 of Law No. 1,079 and Article 218 of the internal regulations of the Chamber of Deputies determine that any citizen is allowed to accuse the President of the Republic or a Minister of State for [impeachable] crimes of accountability by petitioning the Chamber of Deputies.
Article 218 of the regulations requires that the petition must be signed and notarized by the complainant and must be accompanied by documents that prove the allegations, or if it is not possible to present the documents, it must be accompanied by an affidavit indicating the place where the documents can be found and a list, if applicable, with at least five witnesses.
Upon receipt of the petition by the President of the Chamber, and provided that the requirements for its acceptance have been fulfilled, the complaint must be read during the next session of the Chamber and later forwarded to a Special Committee elected to analyze the complaint. The committee must have proportional participation of deputies of all political parties.
Once the complaint has been accepted, the accused person is then notified, and may, if he/she wishes, defend him/herself within the period of ten sessions of the Chamber of Deputies.
If the complaint is not accepted by the President of the Chamber, the order that rejects the receipt of the complaint may be appealed to the full membership of the Chamber of Deputies.
Once the Special Committee is elected it must meet within 48 hours to analyze the complaint; after electing its Chairman and Rapporteur, the Special Committee must issue an opinion within five sessions after the accused person presents a defense, or at the end of the tenth session previously mentioned. The opinion must decide whether to accept or dismiss the complaint.
The opinion issued by the Special Committee must be read during a session of the Chamber of Deputies and published in its entirety, along with the complaint, in the Official Journal of the Chamber of Deputies. Forty-eight hours after the publication of the opinion of the Special Committee, the opinion must be included in the schedule of the next session of the Chamber.
After the opinion has been discussed in the Chamber of Deputies, the opinion must be submitted to the vote of the deputies. If two-thirds of the members of the Chamber vote in favor of the opinion, the impeachment proceeding against the accused person is authorized. The decision authorizing the impeachment proceeding must then be forwarded to the President of the Federal Senate within two sessions.