Constitution

Brazil 1988 Constitution (reviewed 2017)

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Table of Contents

TITLE VI. TAXATION AND BUDGET

CHAPTER I. NATIONAL TRIBUTARY SYSTEM

SECTION I. General Principles

Article 145

The Union, States, Federal District and Counties may levy the following tributes:

  1. taxes;
  2. fees, by virtue of exercise of police power or for effective or potential use of specific and divisible public services provided to taxpayers or made available to them;
  3. assessments for public works.
  1. Whenever possible, taxes shall be personal and shall vary with the economic capacity of the taxpayer. To make these objectives effective, the tax administration may identify the patrimony, income and economic activities of the taxpayer, respecting individual rights, as provided by law.
  2. Fees may not be calculated on the same basis as taxes.

Article 146

A complementary law shall:

  1. deal with conflicts of taxing power among the Union, States, Federal District and Counties;
  2. regulate the constitutional limitations on the taxing power;
  3. establish general rules for tax legislation, particularly as to:
    1. definition of tributes and their types, as well as, with respect to taxes specified in this Constitution, the definition of the respective taxable events, basis for calculation and taxpayers;
    2. tax liability, assessment, credit, limitations periods and laches;
    3. adequate tax treatment for the cooperative acts performed by cooperative entities;
    4. definition of differentiated and favored treatment for micro-firms and small firms, including special or simplified regimes for the tax provided for in art. 155, II; the contributions provided for in art. 195, I and §§ 12° and 13°; and the contribution referred to in art. 239.

Sole Paragraph

The complementary law dealt with in subparagraph III, d, shall also institute a unified regime for collection of taxes and contributions of the Union, States, Federal District and Counties, observing that:

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  1. it shall be optional for the taxpayer;
  2. a state may establish conditions for differentiated enrollment;
  3. collection shall be unified and centralized, and the distribution of the portion of the funds belonging to the respective federative entities shall be immediate, prohibiting any retention or conditioning;
  4. collection, supervision and levying may be divided by the federative entities, adapting a unified national roll of taxpayers.

Article 146-A

In order to prevent disequilibria from competition, a complementary law may establish special criteria for taxation, without prejudice to the jurisdiction of the Union to establish by law rules for the same purpose.

Article 147

In federal territories, the Union has the power to levy state taxes and, if the territory is not divided into counties, county taxes as well. The Federal District has the power to impose county taxes.

Article 148

The Union, through a complementary law, may impose compulsory loans:

  1. to defray extraordinary expenses resulting from public calamity, foreign war or imminence thereof;
  2. in the event of a public investment of urgent character and relevant national interest, observing the provisions of art. 150, III, b.

Sole Paragraph

Applications of the funds derived from a compulsory loan shall be tied to the expense that was the basis for its imposition.

Article 149

The Union has the exclusive power to institute social contributions, contributions for the intervention in the economic domain, and contributions in the interest of professional or economic categories, as instruments of its activity in the respective areas, observing the provisions of arts. 146, III, and 150, I and III, and without prejudice to the provisions of art. 195, § 6°, with respect to the contributions mentioned in that provision.

  1. The States, the Federal District, and Counties may institute a contribution, collected from their employees, for funding their social security regime dealt with in art. 40, at a rate not less than the contribution of civil servants holding effective positions in the Union.
  2. The social contributions and the contribution for the intervention in the economic domain dealt with in the heading of this article:
    1. shall not be levied on export proceeds;
    2. shall also be levied on the importation of foreign products or services;
    3. the rates may be:
      1. ad valorem, based upon the invoice, gross receipts or the value of the transaction and, in the case of imports, the customs value;
      2. specific, based upon the unit of measure adopted.
  3. An individual importer may be treated as the equivalent of a legal entity, as provided by law.
  4. The law shall define the situations in which contributions shall be incurred only once.

Article 149-A

The Counties and the Federal District may institute a contribution, as prescribed by their respective laws, for financing the service of public illumination, observing the provisions of art. 150, I and III.

Sole Paragraph

The contribution referred to in the heading may be assessed on the bill for the consumption of electric energy.

SECTION II. Limitations on the Taxing Power

Article 150

Without prejudice to other guarantees assured the taxpayer, the Union, States, Federal District and Counties are prohibited from:

  1. imposing or increasing a tax without a law that does so;
  2. instituting unequal treatment among taxpayers that are similarly situated, it being prohibited to make any distinction because of professional occupation or job performed by them, regardless of the legal denomination of income, securities or rights;
  3. collecting taxes:
    1. for taxable events that occurred before the law that instituted or increased them went into force;
    2. in the same fiscal year in which the law that instituted or increased them was published;
    3. prior to the expiration of ninety days from the date on which the law that institutes or increases them has been published, observing the provision in line b;
  4. using taxes for purposes of confiscation;
  5. establishing limitations on movement of persons or goods by means of interstate or inter-county taxes, except for collection of tolls for use of highways maintained by the Government;
  6. levying taxes on:
    1. patrimony, income or services of one another;
    2. temples of any religion;
    3. patrimony, income or services of political parties, including their foundations, labor unions and non-profit educational and social assistance institutions, observing the requirements of the law;
    4. books, newspapers, periodicals and paper intended for the printing thereof.
    5. musical phonograms and video phonograms produced in Brazil containing musical or literary musical works by Brazilian authors and/or general works interpreted by Brazilian artists, as well as supporting materials or digital archives which contain them, except in the phase of industrial replication of optical media for leisure reading.
  1. The prohibition of subparagraph III, b, does not apply to the taxes provided for in arts. 148, I; 153, I, II, IV and V; and 154, II; and the prohibition of subparagraph III, c, does not apply to the taxes provided for in arts. 148, I; 153, I, II, III and V; and 154, II, nor to the fixing of the basis of calculation for the taxes provided for in arts. 115, III; and 156, I.
  2. The prohibition contained in subparagraph VI, a, extends to autarchies and foundations instituted and maintained by the Government with respect to the patrimony, income and services connected with their essential purposes.
  3. The prohibitions contained in subparagraph VI, a, and in the preceding paragraph do not apply to the patrimony, income and services connected with the exploitation of economic activities governed by the rules that apply to private ventures or to ventures in which users provide a counter performance or pay prices or tariffs, nor exempt one who has agreed to buy property from the obligation to pay the tax thereon.
  4. The prohibitions contained in subparagraph VI, subsections b and c, encompass only the patrimony, income and services connected with the essential purpose of the entities mentioned therein.
  5. The law shall determine measures for consumer clarification about taxes levied on goods and services.
  6. Any subsidy or exemption, reduction in the basis of calculation, concession of a presumed credit, amnesty or remission involving taxes, fees or contributions, may be granted only through a specific federal, state or county law that exclusively regulates the above enumerated matters or corresponding tax or assessment, without prejudice to the provisions of art. 155, § 2°, XII, g.
  7. A law may impose liability upon the taxpayer for payment of a tax or assessment whose taxable event may occur afterwards, assuring the immediate and preferential restitution of the amount paid should the presumed taxable event not occur.

Article 151

The Union is forbidden:

  1. to levy taxes that are not uniform throughout the entire national territory or that imply a distinction or preference in relation to a State, Federal District or County, to the detriment of another; however, fiscal incentives may be granted to promote balance in socio-economic development among different regions of the Country;
  2. to tax income from public debt obligations of the States, Federal District and Counties, as well as the remuneration and benefits of the respective public agents, at higher levels than those fixed for its own obligations and agents;
  3. to grant exemptions from taxes within the jurisdiction of the States, Federal District or Counties.

Article 152

The States, the Federal District and the Counties are prohibited from establishing a tax differential between goods and services of any nature because of their origin or destination.

SECTION III. Taxes of the Union

Article 153

The Union has the power to levy taxes on:

  1. importation of foreign products;
  2. exportation to other countries of national or nationalized products;
  3. income and earnings of any nature;
  4. industrialized products;
  5. credit transactions, foreign exchange operations, insurance or transactions relating to negotiable instruments or securities;
  6. rural property;
  7. large fortunes, as provided in a complementary law.
  1. The Executive may, with due regard for the conditions and limits established by law, change the rates on the taxes set out in subparagraphs I, II, IV and V.
  2. The tax provided for in subparagraph III:
    1. shall be based on criteria of generality, universality and progressiveness, as provided by law;
    2. revoked.
  3. The tax provided for in subparagraph IV:
    1. shall be selective, based on the essentiality of the product;
    2. shall be noncumulative, with an offset against the tax owed on each transaction of the amount charged on previous transactions;
    3. shall not be imposed on industrialized products destined for export;
    4. shall have a reduced impact on the acquisition of capital goods by the taxpayer, as provided by law.
  4. The tax provided for in subparagraph VI of the heading:
    1. shall be progressive and its rates shall be fixed in a manner that is a disincentive to the maintenance of unproductive properties;
    2. shall not be levied on small rural properties, as defined by law, when worked by the owner if he owns no other real property;
    3. shall be inspected and collected by the Counties that opt to do so, as provided by law, so long as this does not imply a reduction in the tax or any other form of fiscal waiver.
  5. Gold, when defined by law as a financial asset or instrument of foreign exchange, shall be subject exclusively to the tax mentioned in subparagraph V of the heading of this article, which shall be owed on the original transaction; the minimum rate shall be one percent, ensuring transference of the amount collected in the following terms:
    1. thirty percent to the State, Federal District or Territory, depending on the origin;
    2. seventy percent to the County of origin.

Article 154

The Union may impose:

  1. by means of a complementary law, taxes not listed in the preceding article, provide they are noncumulative and have a specific taxable event or basis of assessment other than those specified in this Constitution;
  2. in the case of foreign war or its imminent threat, extraordinary taxes, whether or not included in its taxing power, which shall be gradually repealed when the causes for their creation cease.

SECTION IV. State and Federal District Taxes

Article 155

The States and the Federal District have the power to impose taxes on:

  1. transfers causa mortis and donations of any property or rights;
  2. transactions relating to circulation of goods and the performance of services of interstate and inter-county transportation and communications, even when the transactions and performance begin abroad;
  3. ownership of automotive vehicles.
  1. The tax provided for in subparagraph I:
    1. can be imposed, with respect to real property and its respective rights, by the State or Federal District where the property is located;
    2. can be imposed, with respect to personalty, securities and credit instruments, by the State or Federal District where the inventory or schedule is probated, or the domicile of the donor;
    3. shall have its jurisdiction regulated by a complementary law:
      1. if the donor is domiciled or resident abroad;
      2. if the deceased was a foreign resident or domiciliary, owned property abroad or had an inventory probated abroad;
    4. shall have its maximum rates fixed by the Federal Senate.
  2. The tax provided for in subparagraph II shall conform to the following:
    1. it shall be noncumulative, with an offset against the tax owed on each transaction of circulation of goods or performance of services by the amount charged on the previous ones by the same State, by another State or by the Federal District;
    2. exemption or non-incidence, unless the contrary is determined in legislation:
      1. shall not imply a credit to offset the amount due on subsequent transactions or performances;
      2. shall carry with it annulment of credits for prior transactions;
    3. may be selective, depending upon the essentiality of the merchandise or services;
    4. a resolution of the Federal Senate, on the initiative of the President of the Republic or of one-third of the Senators, approved by an absolute majority of its members, shall set the rates applicable to interstate and export transactions and performances;
    5. the Federal Senate may:
      1. set minimum rates for internal transactions, by resolution on the initiative of one-third and approved by an absolute majority of its members;
      2. fix maximum rates for the same transactions to resolve specific conflicts involving interests of States, by a resolution on the initiative of an absolute majority and approved by two-thirds of its members;
    6. unless there is a decision to the contrary by the States and the Federal District, in the terms of subparagraph XII, g, the intrastate rates on circulation of goods and performing of services may not be lower than those established for interstate transactions;
    7. for transactions and installments that send goods and services to a final consumer located in another State, whether or not such consumer is the taxpayer, the interstate rate is adopted, and it shall be up to the State where the recipient is located to collect the difference between the State’s internal rate and the interstate rate;
      1. Repealed.
      2. Repealed.
    8. liability for collection of the tax corresponding to the difference between the internal rate and the interstate rate dealt with in subparagraph VI shall be attributed to:
      1. to the recipient when he or she is the taxpayer;
      2. to the sender when the recipient is not the taxpayer;
    9. shall also be imposed:
      1. on the entry of goods or merchandise imported from abroad by an individual or a legal entity, even though not a habitual taxpayer, regardless of purpose, as well as on services performed abroad, the tax being allocated to the State where the domicile [of the person] or establishment receiving the merchandise, goods or services is located;
      2. on the total value of the transaction, when merchandise is furnished with services not included in the taxing power of the counties;
    10. shall not be imposed:
      1. on transactions transferring merchandise abroad, nor on services rendered to those abroad, assuring maintenance and utilization of the amount of tax collected in prior transactions and services;
      2. on transactions transferring to other States petroleum, including lubricants, petroleum-derived liquid and gaseous fuels and electric energy;
      3. on gold, in the situation defined in art. 153, § 5°;
      4. on performing communication services in the forms of broadcasting sounds and images with sound for free and gratuitous reception;
    11. shall not include in its assessment basis the amount of the tax on industrialized products, when the transaction between taxpayers involves a product destined for industrialization or commercialization and constitutes the taxable event for both taxes;
    12. a complementary law shall:
      1. define its taxpayers;
      2. deal with tax substitution;
      3. regulate the regime for offsetting taxes;
      4. establish the location of transactions of circulation of goods and performance of services for purposes of collection of the tax and definition of the establishment responsible;
      5. in exports abroad exclude from incidence of the tax services and products other than those mentioned in subparagraph X, a;
      6. provide for maintenance of a credit for services and merchandise sent to other States and exported abroad;
      7. regulate the way fiscal exemptions, incentives and benefits shall be granted and revoked by resolutions of the States and the Federal District;
      8. define fuels and lubricants on which the tax shall be imposed only once, regardless of end use, in which case the provision in subparagraph X, b, shall not apply;
      9. fix the basis for calculation so that the tax falls on the entire amount, as well as upon the importation from abroad of the good, merchandise or service.
  3. Except for the taxes dealt with in subparagraph II of the heading of this article and in art. 153, I and II, no other tax shall be imposed on transactions involving electric energy, telecommunication services, petroleum by-products, fuels, and minerals of the Country.
  4. In the case of subparagraph XII, h, the following shall be observed:
    1. in transactions involving lubricants and fuels derived from petroleum, the tax shall be allocated to the State where the consumption occurs;
    2. in interstate operations, between taxpayers, involving natural gas and its by-products and lubricants and fuels not included in subparagraph I of this paragraph, the tax shall be divided between the States of origin and destination, maintaining the same proportion that occurs in transactions involving other merchandise;
    3. in interstate transactions involving natural gas and its by-products, and lubricants and fuels not included in subparagraph I of this paragraph, and destined to the non-taxpayer, the tax shall belong to the State of origin;
    4. the rates of the tax shall be defined by determination of the States and the Federal District, in accordance with § 2°, XII, g, observing the following:
      1. they shall be uniform in all national territory, but may be differentiated by product;
      2. they may be specific by unit of measure adopted or ad valorem, levied on the value of the transaction or on the price for the product or its similar in freely competitive sales;
      3. they may be reduced and re-established, the provision of art. 150, III, b, being inapplicable.
  5. The rules necessary for application of the provisions of § 4°, including those relating to the ascertainment and destination of the tax, shall be established by determination of the States and the Federal District in accordance with § 2°, XII, g.
  6. The tax provided for in subparagraph III:
    1. shall have minimum rates fixed by the Federal Senate;
    2. shall have differentiated rates in accordance with type and utilization.

SECTION V. County Taxes

Article 156

The Counties shall have the power to levy taxes on:

  1. urban buildings and land;
  2. non-gratuitous inter vivos transfers of real property, by whatever instrument, whether by natural or by physical accession, and any in rem rights to real property, except for guarantees, as well as the assignment of rights for its acquisition;
  3. services of any nature not included in art. 155, II, as defined in a complementary law;
  4. revoked.
  1. Without prejudice to the progressivity in time to which art. 182, § 4°, subparagraph II refers, the tax provided for in subparagraph I may:
    1. be progressive in accordance with the value of the real property; and
    2. have different rates in accordance with the location and use of the real property.
  2. The tax provided for in subparagraph II:
    1. shall not be imposed on the transfer of property or rights incorporated into the patrimony of a legal entity to pay up its capital, nor upon the transfer of property or rights stemming from merger, incorporation, spin-off or dissolution of a legal entity, unless, in such cases, the preponderant activity of the acquiring party is the purchase and sale of such property or rights, the leasing of real property or commercial leasing;
    2. goes to the County where the property is located.
  3. With respect to the tax provided for in subparagraph II of the heading of this article, a complementary law shall:
    1. set maximum and minimum rates;
    2. exclude from its application exports of services;
    3. regulate the form and conditions as well as fiscal exemptions, incentives and benefits that shall be granted and revoked.
  4. Revoked.

SECTION VI. Division of Tax Revenues

Article 157

The following shall be allocated to the States and Federal District:

  1. proceeds from collection of the federal tax on income and earnings of any nature, withheld from income paid, by whatever instrument, by them, their autarchies and by foundations they institute and maintain;
  2. twenty percent of the proceeds from the collection of the tax that the Union institutes in the exercise of the power conferred on to it by art. 154, I.

Article 158

The following shall be allocated to the Counties:

  1. the proceeds from the collection of the federal tax on income and earnings of any nature, withheld from income paid, by whatever instrument, by them, their autarchies and by foundations they institute and maintain;
  2. fifty percent of the proceeds from collection of the federal tax on rural property, relative to the real property situated therein, or the entire proceeds in the event [the Counties] elect the option referred to in art. 153, § 4°, III;
  3. fifty percent of the proceeds from the collection of the state tax on ownership of automotive vehicles licensed in their territory;
  4. twenty-five percent of the proceeds from the collection of the state tax on transactions of circulation of goods and on performance of services of interstate and inter-county transportation and communication.

Sole Paragraph

The revenue portions belonging to the Counties as mentioned in subparagraph IV shall be credited according the following criteria:

  1. at least three-fourths, in proportion to the value added in transactions of circulation of merchandise and performing services carried out in their territories;
  2. up to one-fourth, as established by state law or, in the case of the Territories, by federal law.

Article 159

The Union shall turn over:

  1. forty-nine percent of the proceeds from the collection of taxes on income and earnings of any nature and on industrialized products, in the following manner:
    1. twenty-one and one-half percent to the Revenue Sharing Fund of the States and the Federal District;
    2. twenty-two and one-half percent to the Revenue Sharing Fund of the Counties;
    3. three percent, for application in programs to finance the productive sectors of the North, Northeast and Center-West Regions, through their regional financial institutions, in accordance with regional development plans, with the semi-arid area of the Northeast being assured half the funds intended for the Region, as provided by the law;
    4. one percent to the Revenue Sharing Fund of the Counties, which shall be delivered during the first 10 days of the month of December of each year.
    5. one percent to the Revenue Sharing Fund of the Counties, which shall be delivered during the first 10 days of the month of July of each year.
  2. ten percent of the proceeds from the collection of the tax on industrialized products to the States and Federal District, in proportion to the value of respective exports of industrialized products;
  3. twenty-nine percent of the proceeds from collection of the contribution for intervention in the economic domain provided for in art. 177, § 4°, to the States and the Federal District, distributed as provided by law, observing the destination referred to in subparagraph II, c, of [art. 177, § 4°].
  1. For purposes of calculating the amount to be turned over under subparagraph I, the portion of the collection of the tax on income and earnings of any nature belonging to the States, Federal District and Counties according to arts. 157, I, and 158, I, shall be excluded.
  2. No unit of the federation may be allocated a share in excess of twenty percent of the amount referred to in subparagraph II, and any excess shall be distributed among the other participants, maintaining the apportionment criteria established therein.
  3. The States shall turn over to the respective Counties twenty-five percent of the funds they receive under the terms of subparagraph II, observing the criteria established in art. 158, sole paragraph, I and II.
  4. Twenty-five percent of the amount of resources dealt with in subparagraph III that belong to each State shall be destined for the Counties, as provided by the law referred to in the mentioned subparagraph.

Article 160

Retention or any restriction on remittance and use of the funds allocated under this section to the States, Federal District and Counties, including any tax additions and increases, is prohibited.

Sole Paragraph

This prohibition does not prevent the Union and the States from conditioning delivery of funds:

  1. upon payment of their loans, including those of their autarchies;
  2. upon compliance with the provision of art. 198, § 2°, subparagraphs II and III.

Article 161

A complementary law shall:

  1. define the value added for purposes of art. 158, sole paragraph, I;
  2. establish rules for remittance of funds dealt with in art. 159, especially the criteria for apportionment of funds provided for in its subparagraph I, seeking to maintain socio-economic balance between States and Counties;
  3. provide for monitoring by the beneficiaries of the calculation of the quotas and release of the shares provided for in arts. 157, 158 and 159.

Sole Paragraph

The Tribunal of Accounts of the Union shall calculate the quotas referring to the participation funds mentioned in subparagraph II.

Article 162

The Union, the States, the Federal District and the Counties shall announce, by the last day of month following collection, the amounts of each of the taxes collected, the funds received, the value of the taxes remitted and to be remitted, and the numerical expression of the apportionment criteria.

Sole Paragraph

The data disclosed by the Union shall be broken down by State and County, and those of the States, by County.

CHAPTER II. PUBLIC FINANCE

SECTION I. General Rules

Article 163

A complementary law shall provide for:

  1. public finances;
  2. the public debt, both foreign and domestic, including the debt of the autarchies, foundations and other entities controlled by the Government;
  3. concession of guarantees by governmental entities;
  4. issuance and redemption of government bonds;
  5. financial supervision of the direct and indirect public administration;
  6. foreign exchange transactions carried out by agencies and entities of the Union, States, Federal District and the Counties;
  7. compatibility of functions of the official credit institutions of the Union, safeguarding the full characteristics and operating conditions of those intended for regional development.

Article 164

The power of the Union to issue currency shall be exercised exclusively through the Central Bank.

  1. The Central Bank is prohibited from directly or indirectly granting loans to the National Treasury and to any agency or entity that is not a financial institution.
  2. In order to regulate the money supply or interest rates, the Central Bank may purchase and sell securities issued by the National Treasury.
  3. The cash balances of the Union shall be deposited in the Central Bank; the cash balances of the States, Federal District, Counties, governmental agencies or entities and companies controlled by the Government shall be deposited in official financial institutions, except for cases established by law.

SECTION II. Budgets

Article 165

Laws initiated by the Executive shall establish:

  1. the multi-year plan;
  2. the budgetary directives;
  3. the annual budgets.
  1. The law that institutes the multi-year plan shall establish, on a regional basis, the directives, objectives and targets of the federal public administration for capital expenditures and other expenses resulting therefrom and for those regarding continuing programs.
  2. The law of budgetary directives shall contain the targets and priorities of the federal public administration, including the capital expenses for the following fiscal year, shall guide preparation of the annual budget law, shall provide for changes in tax legislation and shall establish the investment policies for official developmental financing agencies.
  3. The Executive shall publish, within thirty days after the closing of each two-month period, a report summarizing its implementation of the budget.
  4. The national, regional and sectorial plans and programs provided for in this Constitution shall be prepared in accordance with the multi-year plan and shall be examined by the National Congress.
  5. The annual budget law shall include:
    1. the fiscal budget for the Branches of the Union, their funds, agencies, and entities of direct and indirect administration, including foundations instituted and maintained by the Government;
    2. the investment budget for companies in which the Union directly or indirectly holds the majority of the voting capital;
    3. the social security budget, covering all entities and agencies of direct or indirect administration connected with social security, as well as funds and foundations instituted and maintained by the Government.
  6. The budget bill shall be accompanied by a regionalized demonstration of the effect on revenues and expenses resulting from exemption, amnesties, remissions, subsidies and benefits of a financial, tax and credit nature.
  7. The budgets established in § 5°, I and II, of this article, compatible with the multiyear plan, shall include among their functions reducing interregional inequalities according to population criteria.
  8. The annual budget law shall not contain any extraneous provisions that do not represent a forecast of revenues and establishment of expenses, but such prohibition does not include authorization to create supplementary appropriations and borrow money, even by anticipating revenues, as provided by law.
  9. A complementary law shall:
    1. determine the effectiveness and terms of the fiscal year, preparation and organization of the multi-year plan, the law of budgetary directives and the annual budget law;
    2. establish rules of financial and property management by the direct and indirect administration, as well as conditions for the institution and operation of funds.
    3. provide criteria for the equitable execution, as well as the procedures, that shall be adopted when there are legal and technical impediments, completion of what remains to be paid and limitations on mandatory programming, for realization of the provision in § 11° of art. 166.

Article 166

Bills regarding the multi-year plan, budgetary directives, annual budgets and additional credits shall be examined by both Chambers of the National Congress in accordance with their common internal rules.

  1. A permanent Joint Committee of Senators and Deputies shall be responsible for:
    1. examining and issuing its opinion on the bills referred to in this article and on annual accounts submitted by the President of the Republic;
    2. examining and issuing its opinion on the national, regional and sectorial plans and programs provided for in this Constitution, and monitoring and supervising the budget, without prejudice to the activity of the other committees of the National Congress and of its Chambers, created in accordance with art. 58.
  2. Amendments shall be submitted to the Joint Committee, which shall issue its opinion on them, and shall be examined, in accordance with internal rules, by the Plenary Session of the two Chambers of the National Congress.
  3. Amendments to the annual budget bill or to bills that modify it may only be approved if:
    1. they are compatible with the multi-year plan and with the law of budgetary directives;
    2. they specify the necessary funds, which may only stem from elimination of expenditures, excluding those that deal with:
      1. appropriations for personnel and their indirect costs;
      2. debt servicing;
      3. constitutional tax transfers to the States, Counties and Federal District; or
    3. they are related:
      1. to the correction of errors or omissions; or
      2. to the provisions in the text of the bill.
  4. Amendments to the budgetary directives bill may not be approved if they are incompatible with the multi-year plan.
  5. The President of the Republic may send a message to the National Congress proposing modification of the bills referred to in this article so long as the Joint Committee has not started to vote on the part for which a change is proposed.
  6. Bills on the multi-year plan, budgetary directives and annual budget shall be submitted by the President of the Republic to the National Congress in accordance with the complementary law referred to in art. 165, § 9°.
  7. So long as they do not conflict with the provisions of this section, the other rules on legislative procedure apply to the bills mentioned in this article.
  8. Any funds which, as a result of a veto, amendment or rejection of the annual budget bill, have no corresponding expenditure, may be used, as the case may be, through special or supplemental appropriations, with prior and specific legislative authorization.
  9. Individual amendments to the draft of the budget law shall be approved with a limit of 1.2% (one and two-tenths percent) of the current net receipts projected in the draft sent by the Executive, but half of this percentage limit shall be destined for public health actions and services.
  10. Execution of the amount destined for public health actions and services provided for in § 9°, including costs, shall be computed for the purpose of performance of subparagraph I of § 2° of art. 198, prohibiting use for payment of personnel or social charges.
  11. Execution of the budgetary and financial programming referred to in § 9° of this article is mandatory, in an amount corresponding to 1.2% (one and two-tenths percent) of the net current receipts collected in the prior period, in accordance with the criteria for equitable execution of programming defined in the complementary law provided for in § 9° of art. 165.
  12. Execution of the budgetary programming provided for in § 9° of this article shall not be mandatory in cases of impediments of technical order.
  13. When the Union’s mandatory transference for execution of the programming provided for in § 11 of this article is destined for the States, Federal District, and Counties, such transference shall be independent of performance by the receiving federative entity and shall not be part of the basis for calculation of net current receipts for application of the limits on personnel expenses dealt with in the initial paragraph of art. 169.
  14. In case of a technical impediment to the allotment of expense that makes up the programming, in the form of § 11 of this article, the following measures shall be adopted:
    1. within 120 (one hundred-twenty days) after publication of the budget law, the Executive, Legislature, Judiciary, Public Ministry and the Public Defender shall send to the Legislature justifications for the impediment;
    2. within 30 (thirty) days after termination of the period provided for in subparagraph I, the Legislature shall indicate to the Executive the re-management of the programming whose impediment cannot be overcome;
    3. by the 30th of September or within 30 (thirty) days after termination of the period provided for in subparagraph III, the Executive shall send a draft of a law on re-handling the programming whose impediment cannot be overcome;
    4. if, by the 20th of November or within 30 (thirty) days after the end of the period provided for in subparagraph III, the National Congress does not consider the draft law, the re-handling shall be implemented by Executive act, in accordance with the terms provided for in the budgetary law.
  15. After the period provided in subparagraph IV of § 14, execution of the budgetary programming provided in § 11 shall not be mandatory in cases of impediments justified in the notification provided for in subparagraph I of § 14.
  16. What remains to be paid shall be considered for purposes of performance of financial execution provided for in § 11, up to a limit of 0.6% (six-tenths of one percent) of the current net receipts realized in the prior fiscal period.
  17. If verified that re-estimate of receipts and expenses may result in non-compliance with the fiscal target established in the law of budgetary directives, the amount provided for in § 11 of this article may be reduced up to the same proportion of the limitation on the total of discretionary expenditures.
  18. Execution of mandatory programming shall be considered equitable if it deals with the amendments presented in an egalitarian and impersonal manner, regardless of authorship.

Article 167

It is prohibited to:

  1. begin programs or projects not included in the annual budget law;
  2. expend funds or assume direct obligations that exceed the budgetary or additional appropriations;
  3. borrow funds in excess of the amount of capital expenses unless authorized through supplemental or special appropriations for a precise purpose, approved by an absolute majority of the Legislature;
  4. bind receipt of tax revenues to an agency, fund or expenditure, except for apportionment of the proceeds from the collection of taxes referred to in arts. 158 and 159, allocation of funds for public health activities and services, for maintenance and development of education and for carrying out tax administration activities, as determined respectively in arts. 198, § 2°, 212, and 37, XXII, and guaranteeing loans by anticipating revenues provided for in art. 165, § 8°, as well as the provision of § 4° of this article;
  5. open a supplemental or special appropriation without prior legislative authorization and without indication of the respective funds;
  6. reclassify, reallocate or transfer funds from one programming category to another or from one agency to another without prior legislative authorization;
  7. grant or utilize unlimited appropriations;
  8. utilize, without specific legislative authorization, funds from the fiscal and social security budgets to satisfy a need or cover a deficit of companies, foundations and funds, including those mentioned in art. 165, § 5°;
  9. institute funds of any nature without prior legislative authorization;
  10. transfer resources voluntarily and concede loans, including by anticipation of revenues, by the Federal and State Governments and their financial institutions, for payment of the expenses of active, inactive and retired personnel of the States, Federal District and Counties;
  11. utilization of the resources stemming from social contributions dealt with in art. 195, I, a, and II for payment of expenses other than payment of benefits for the general social security regime dealt with in art. 201.
  1. No investment whose execution extends beyond a fiscal year may be started without prior inclusion in the multi-year plan or without a law authorizing such inclusion, under penalty of an impeachable offense.
  2. Special and extraordinary appropriations shall be in force in the fiscal year in which they are authorized, unless the act authorizing them is promulgated during the last four months of that fiscal year, in which case, the limits of their balances being reopened, they shall be incorporated into the budget of the subsequent fiscal year.
  3. Opening of extraordinary appropriations shall only be permitted to meet unforeseeable and urgent expenses, such as those resulting from war, internal commotion or public calamity, observing the provisions of art. 62.
  4. Binding one’s own receipts generated by the taxes referred to in arts. 155 and 156, and of the resources dealt with in arts. 157, 158 and 159, I, a and b, and II, is permitted as a guarantee or counter-guarantee to the Union and for payment of debts owed to it.
  5. Reclassification, reallocation, or transference of resources from one programming category to another shall be permissible in the area of activities of science, technology, and innovation, for the purpose of making viable the results of projects restricted to these functions, via an Executive act, without need for the prior legislative authorization provided for in subparagraph VI of this article.

Article 168

One-twelfth of the funds corresponding to budgetary appropriations, including supplemental and special appropriations, destined for agencies of the Legislature, Judiciary, Public Ministry and the Public Defenders, shall be delivered to them by the twentieth day of each month, as provided for by the complementary law referred to in art. 165, § 9°.

Article 169

Expenditures for active and inactive personnel of the Union, States, Federal District and Counties may not exceed the limits established by complementary law.

  1. Granting any advantage or increase in remuneration, creation of offices, jobs and positions or changes in career structures, as well as the admission or contracting of personnel of whatever title, by agencies and entities of direct or indirect administration, including government-created and maintained foundations, may only be accomplished:
    1. if there is a prior budgetary appropriation sufficient to cover the estimated personnel expenditures and the increases resulting therefrom;
    2. if there is a specific authorization in the law of budgetary directives, with the exception of public companies and mixed-capital companies.
  2. Once the period established in the complementary law referred to in this article for adoption of the parameters provided herein has run, all remittances of federal or state funds to the States, Federal District and Counties that do not observe the referred to limits shall be immediately suspended.
  3. For compliance with the limits established as the basis of this article, during the period fixed in the complementary law referred to in the heading, the Union, States, Federal District and Counties shall adopt the following measures:
    1. reduction by at least 20 percent in expenses with commission offices and positions of confidence;
    2. dismissal of non-tenured civil servants.
  4. If the measures adopted on the basis of the prior paragraph are insufficient to assure compliance with the determinations of the complementary law referred to in this article, tenured civil servants may lose their office, so long as the motivating normative act of each one of the Branches specifies the functional activity or administrative agency or unit that is the object of the reduction in personnel.
  5. A civil servant who loses his office in accordance with the prior paragraph shall have a right to just compensation corresponding to one month of remuneration for each year of service.
  6. Offices that are eliminated in accordance with the prior paragraphs shall be considered extinct. Creation of offices, jobs or positions with equal or similar powers is prohibited for a period of four years.
  7. Federal law shall provide for general rules to be obeyed for carrying out the provisions of § 4°.

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