Rodrigo Cunha’s decision creates rifts among senators and draws criticism from Lower House Speaker Arthur Lira

06/05/2024

---

Senator Rodrigo Cunha — Foto: Waldemir Barreto/Agência Senado

In a move that caught the government by surprise, Senator Rodrigo Cunha, the rapporteur of the bill establishing the Green Mobility and Innovation Program (Mover), removed the 20% tax on international purchases up to $50 on Tuesday, deeming it “irrelevant” to the bill’s nature. The change led to disagreements among government-aligned senators and drew criticism from Lower House Speaker Arthur Lira. The deliberation was postponed to this Wednesday.

Despite Senate President Rodrigo Pacheco expressing support for the tax, he chose Mr. Cunha, who presents himself as independent, as the rapporteur. The other candidate for the role was government leader Senator Jaques Wagner.

Additionally, while government senators learned about the changes made by Mr. Cunha through the press shortly before the scheduled vote, Mr. Pacheco had been informed in advance during discussions in recent days.

Following the announcement by Mr. Cunha, Mr. Wagner attempted to contact him by phone but was unsuccessful. Later, on the Senate floor, Mr. Cunha spoke with the government leader and denied that he was “avoiding” anyone.

“The Brazilian people were surprised when the Lower House included an irrelevant subject to the Mover program, taxing international purchases at 20%. This will be removed from the text as it is a legislative ploy,” Mr. Cunha announced in a press conference early in the afternoon. “In reality, it is a bill to stimulate and encourage the modernization of the country’s vehicles, which has nothing to do with taxing companies,” he added. Mr. Cunha argued that the taxation of international purchases could be addressed separately in another bill, passing through thematic committees first.

After Mr. Cunha’s statement, Mr. Pacheco defended the rapporteur’s autonomy in crafting his report but also said that taxing international purchases is appropriate. “Establishing a uniform tax between what comes from abroad and what is produced here aligns with our goal of developing the national industry,” he said.

Leaders of some parties were willing to support a separate vote to reinstate the tax. However, the government leader in the Senate feared that a nominal vote, where each position is recorded, could be risky. Mr. Wagner then requested a postponement of the bill’s analysis.

“There is a lot of communication noise, and I think voting on this matter now would cause much confusion. I prefer to work until tomorrow [Wednesday] to develop a procedure for voting on this matter. If we vote today, it will return to the House, delaying the decision,” said Mr. Wagner.

The government leader has sought an agreement to approve the bill as it stands, avoiding a return to the Lower House, but with a commitment from President Lula to veto certain points. The provisional presidential decree that created Mover lapsed last Friday, and the sector now depends on the bill’s approval.

Besides the government, retail, and industry sources said the plan was for a symbolic vote (by agreement) in the Senate on Tuesday to pass the bill with the tax. The sector also learned of the rapporteur’s decision when the report was presented.

Mr. Cunha did not only exclude the tax on international purchases. The rapporteur removed all riders from the bill. Among them was the provision establishing a local content policy for oil and natural gas exploration and production activities.

On the other hand, the government supported the removal of this provision as it had faced criticism from Vice President Geraldo Alckmin.

Amid the discomfort caused by Mr. Cunha’s report, Mr. Lira said he was informed by Mr. Pacheco that the parties are organizing to restore the initially agreed-upon text. “There must be a unified direction regarding established agreements,” Mr. Lira told journalists. “I believe the government will correct this and vote on the agreed-upon text,” he added.

He refrained from attributing Mr. Cunha’s changes, with whom he was once allied but is currently estranged, to possible government coordination failures. He also mentioned contacting Finance Minister Fernando Haddad to discuss the matter, who assured him that no agreement had been made to remove the tax.

*Por Julia Lindner, Caetano Tonet, Marcelo Ribeiro, Jéssica Sant’Anna, Adriana Mattos — Brasília

Source: Valor International

https://valorinternational.globo.com/