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May 28th, 2018

Legislative Newsletter - Edition 092

Brazil Stalled

Brazil still monitors with caution from North to South the reflexes of truck strike that started last Monday, May 21st.

Legislative Newsletter - Edition 092

Brazil still monitors with caution from North to South the reflexes of truck strike that started last Monday, May 21st. That lead to a race to gas stations, lack of products in supermarkets as well as non-operating airports and essentials services threatened by shortages. Even with measures announced by President Michel Temer last Sunday, May 27th, , many  truck drivers did not return to their jobs. Even when they return to the roads, it might take some days for all operations to get back on track. 

The President announced the government will adopt the following measures in order to reach an agreement with the category: a) reduction of R$0,46 per liter of diesel in the refineries, ensuring that this reduction achieves the prices in the pumps- valid for the next 60 days. After this period, the price adjustments are going to be in a monthly basis; b) A President decree will guarantee the autonomous truck driver 30%, at least, of the freight of Conab ( Nacional Supply Company) - Decree 831/2018; c) A Decree that will institute the Policy of Minimum Price of  Load Transportation (Decree 832/2018); d) A Provisory Measure in order to exempt the charge of the suspended axle in tolls on  Federal, State and Municipal roads (Decree 833/2018).

The measures announced on Sunday, were due to the persistence of the strike and road blocking by the truck drivers, having in mind the unsuccessful deal announced by the government in the last Thursday, May 24th.  In this deal most points discussed and claimed by drivers were taken in consideration by the Government in order to end the strike, but it did not work so the strike continued and roads kept blocked throughout the country.  President Temer then, on Friday, announced the Decree for the Guarantee of Law and Order in the national territory, allowing the use of the Military Forces to free the road. Since then the roads started to be unblocked, but the strike is still on.

In view of such situation, a Crisis Committee has been created to monitor the reflexes of the strike. It provides President Michel Temer with information and assistance, submitting new proposals and trying new solutions in order to end the strike mobilization.

The presidents of the House of Representative and Senate , sent messages last Sunday to their pairs seeking their presences in on Monday, at the Plenary, for the discussion of the crisis that afflicts the country.

The Decree that regulates the prices of the road freight is based in the Bill that is going through the Federal Senate – PLC 121/2017- which creates the Policy of Minimum Price in the Cargo Transport - through a biannual price table elaborated by a competent body, with charged by kilometer driven and load type. These parameters must be fixed in January and July of each year. The minimum prices must be defined considering the oscillation and importance of the diesel oil as well as toll charge in the composition of freight cost. This Bill is in the Order of the Day in the Plenary of the Senate. However, to be evaluated the House will have to vote, firstly, 6 Decrees from the President that are obstructing[1] the agenda.

The Bill that reviews the taxation in the payroll, voted in the last week, in the House of Representatives - PL 8456/2017-, reported by the Representative Orlando Silva (PcdoB/SP) that added, after a deal done between some leaders and the President of the House, Rodrigo Maia, the exemption of the PIS-COFINS of the diesel, must have this dispositive withdrawn in the Senate, since  the maintenance of this dispositive adding the concessions made by the Government would place burden in  tax collection.

In measures from President there is reduction in diesel oil tax but not total exemption as approved at the text by the Plenary of the House of Representatives, This point was not in the Government plans and the impact calculation was underestimated by the rapporteur. It was highlighted by President Temer that the sector of freight transport will not be included in the list of taxed sectors.

The task force of the government and the Houses presidents during this week is to obtain quorum to vote the Bill that reviews the taxation in the payroll - PLC 52/2018 - and the Decrees of the President. However, there are obstacles in the path of the Representatives, such as the shortage of fuel in airports and feelings running high because of the truck drivers mobilization around Brazil, which can difficult the arrival of the Representatives in Brasilia.

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[1] In the terms of the article 64, §2º, of the Federal Constitution the Decree  presented by the President must be analyzed within 45 (fourty five) days of your publication, by the Congress, in case of the deadline does not be respected, it will be in Day Order of the Houses and will have to be voted before any other matter, in other words, to discuss or vote any proposition it will be necessary,  firstly the approval or rejection of the Decree to, only then, liberate agenda to other legislative propositions.

Understand the Provisory Measure

https://www.congressonacional.leg.br/materias/medidas-provisorias/entenda-a-tramitacao-da-medida-provisoria