Finance Minister says president is consulting other ministers before deciding whether to trigger the STF against the setback in the legislature
The Minister of Finance, said on Friday (27), in São Paulo, that he is awaiting a definition of the President (PT) about the possibility of judicializing the overthrow of the decree that increased the rates of the IOF (Tax on Financial Operations). The text was rejected by the National Congress with a large majority. Haddad said he has already heard by Lula and that the president is talking to other ministers before making a definitive decision. “We will wait first for the president’s decision, okay? He heard me, he is listening to other ministers,” said the farm holder after an event at USP law school. The minister did not answer other questions because of the tight schedule.
Setback in Congress
The decree that provided for IOF increase was overthrown by 383 votes to 98 in the House of Representatives. In the Senate, the rejection was symbolic, with no nominal voting count. The Congress considered that the executive used the tax, originally regulatory in nature, for purely collecting purposes, which generated criticism even among government allies. The overthrow of the decree represented a significant defeat to the Planalto, which counted as part of the effort to meet the fiscal target in 2025.
Judicialization in Analysis
After the vote, the government began to study the possibility of triggering the Federal Supreme Court (STF) to try to reverse the decision of Congress. The claim would be that the Legislature would not have jurisdiction to stop a decree dealing with the regulation of tax rates of a tax whose change is the executive’s prerogative. However, Broadcast -listened tax law experts assess that an STF action is low with success. They point out that the legislative decree approved by the congress is also constitutional and that the use of IOF for fiscal purpose can configure deviation of purpose. The analysis of the Supreme, in this scenario, could lean to the understanding that Congress acted within its competence by curbing a measure that, according to parliamentarians, wounded the balance between the powers.
Political reactions
The opposition harshly criticized the idea of judicialization. Deputies and senators stated that bringing the decision to the Supreme Court would be an “attack on parliament sovereignty” and an attempt to undermine independence between powers. For oppositionists, the government needs to dialogue with Congress and seek alternatives for fiscal adjustment, instead of resorting to the judiciary. The final decision is now in the hands of President Lula, who should weigh the political and legal risks before defining whether the executive will take action in the Supreme. The official position is expected to be released in the coming days.
