As a manner of diminishing the damage caused by the new coronavirus pandemic, the Federal Government postponed and further suspended some payments, among those are taxes and obligations, such as FGTS collections (Government Severance Indemnity Fund for Employees). In addition, tax debts may also be renegotiated, in some cases.
The National Monetary Council (CMN) has provided that the main bans may renegotiate an extension of their debts as a measure for confronting the crisis. Agricultural Producers and Cattle farmers may also request the postponing of rural credit installments. In addition, the National Health Agency (ANS) concluded an agreement to ensure defaulting patients are serviced normally until the end of July.
In addition to the Federal Government, states are implementing actions to postpone payment of local taxes and prevent interruption of water, power and gas supplies. Low income consumers are free from power bills for 90 days in the entire country.
Companies may also postpone some payments, such as employer’s contributions INSS (National Social Security Institute), Contribution to Social Security Financing (COFINS) and Social Integration Programs (PIS), and Government Employee Fund (PASEP). April payments shall be settled in August, may payments shall be settled in October. For micro businesses, the federal shares of the Simples Nacional tax were postponed for six months, and state and municipal shares were postponed for three months.
“It is invaluable that the governments address the needs of companies, in order to avoid full economic collapse. Among these needs, the most important, doubtlessly, is cash generation or maintenance. Suspension or postponement of tax payments is a measure that obviously helps companies to conserve and manage cash flow during the crisis”, says Bruno Zaroni, partner at Zaroni Advogados.