STF Justice André Mendonça asked for a ruling on the case that analyzes the maintenance of exemptions and incentives for various types of pesticides. As a result, the score, which had been in favor of agribusiness by 4 votes, was reset to zero, and the Justices rectified their votes in the physical plenary session.
The Direct Action of Unconstitutionality, which discusses the clauses of Confaz Agreement 100/1997 and the rules of Decree 7.660/2011, which grant significant benefits to pesticides, was filed by PSOL, on the grounds that these benefits violate fundamental rights and affront the principle of tax selectivity.
In the virtual trial, Reporting Justice Edson Fachin had voted to rule out the exemption and incentives related to pesticides, highlighting the danger of the excessive use of pesticides for the environment and public health. Justice Carmem Lúcia followed the rapporteur’s vote.
Justice Gilmar Mendes, on the other hand, voted in the opposite direction, considering the tax exemption to be valid, given its essentiality to agricultural production, arguing that its removal would make the final price of products more expensive for the end consumer. Justice Alexandre de Moraes followed the same line, adding that the products ensure Brazil’s economic competitiveness in the international market, stressing that there is already a rigorous process of toxicological, environmental and agronomic analysis to minimize and compensate for any adverse effects of pesticides.
Finally, Justice André Mendonça’s vote, joined by Justice Flávio Dino, established a third current, to the effect that exemptions and incentives should be analyzed by the State and Federal Executive, the entities responsible for re-evaluating the current tax policy and readjusting its burden, granting a period of 90 days to present studies of the time limits, scope, costs and results of these tax policies to the Court.
According to data made available in the case file by Croplife Brasil, the removal of the tax benefits is expected to cost the agribusiness sector R$8.39 billion per year.
There is still no date set for the physical judgment, but agribusiness must remain attentive to the next steps of the judiciary, in order to guarantee its competitiveness in the domestic and international markets, always counting on the support of the Marcos Martins Advogados tax team to clarify any doubts on this important issue.
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