PGFN Fiscal Recovery Program

The PGFN’s Fiscal Recovery Program consolidates actions to facilitate the renegotiation of debts.

The Office of the Attorney-General of the National Treasury (PGFN) published, on October 1, PGFN Ordinance No. 21,562, of September 30, 2020, which instituted the Fiscal Recovery Program, an initiative that consolidates different actions with the aim of assisting debtors in the regularization of debts registered in the Active Debt of the Union (DAU), in the context of overcoming the economic and financial crisis arising from the pandemic caused by Covid-19.

Among the actions, some are related to the easing of the PGFN’s collection measures. They are:

• granting of tax regularity, with the issuance of a clearance certificate (CND) or a positive certificate with the effect of a clearance certificate (CP-EN);
• suspension of the registration in the Information Registry of Unpaid Credits of the Federal Public Sector (CADIN) relating to debts owed to the PGFN;
• suspension of the submission of Active Debt Certificates for protest;
• authorization to halt a protest of an Active Debt Certificate that has already been effected;
• suspension of tax foreclosures and the respective requests for judicial freezing of bank accounts and for provisional execution of guarantees, including auctions already scheduled;
• suspension of the liability recognition procedures provided for in PGFN Ordinance No. 948/2017;
• suspension of the other administrative or judicial collection measures.

In addition, other actions of the Program involve making available different settlement agreements that allow the debtor to renegotiate his debts owed to the PGFN, by means of special conditions of discounts and terms. The available settlement agreements are:

For individuals:

• the extraordinary settlement provided for in PGFN Ordinance No. 9,924/2020;
• the exceptional settlement provided for in PGFN Ordinance No. 14,402/2020;
• the settlement of debts owed by small rural producers and family farmers, arising from rural credit operations and from debts contracted under the Land Fund and Agrarian Reform and the Loan Agreement 4.147-BR, provided for in PGFN Ordinance No. 21561/2020;
• the settlement of low-value tax litigation debts, considered to be those whose consolidated value of registration in active debt is equal to or less than 60 (sixty) minimum wages, provided for in PGFN Public Notice No. 16/2020;
• the possibility of individual settlement, under the terms provided for in PGFN Ordinance No. 9,917/2020;
• the possibility of entering into a Procedural Legal Transaction for the resolution of registered debts, under the terms of PGFN Ordinance No. 742/2018.

For legal entities:

• the extraordinary settlement for individual entrepreneurs, microenterprises, small businesses, educational institutions, Santas Casas de Misericórdia, as well as for cooperative societies, religious organizations and other civil society organizations referred to in Law No. 13,019, of July 31, 2014, provided for in PGFN Ordinance No. 9,924/2020;
• the extraordinary settlement for other legal entities provided for in PGFN Ordinance No. 9,924/2020;
• the exceptional settlement for individual entrepreneurs, microenterprises, small businesses, educational institutions, Santas Casas de Misericórdia, as well as for cooperative societies, religious organizations and other civil society organizations referred to in Law No. 13,019/2014, provided for in PGFN Ordinance No. 14,402/2020;
• the exceptional settlement for other legal entities provided for in PGFN Ordinance No. 14,402/2020;
• the exceptional settlement for debts under the Unified Special Regime for the Collection of Taxes and Contributions owed by Microenterprises and Small Businesses (Simples Nacional, Brazil’s simplified tax regime) provided for in PGFN Ordinance No. 18,731/2020;
• the settlement of debts arising from rural credit operations and from debts contracted under the Land Fund and Agrarian Reform and the Loan Agreement 4.147-BR, provided for in PGFN Ordinance No. 21561/2020;
• the settlement of low-value tax litigation debts, considered to be those whose consolidated value of registration in active debt is equal to or less than 60 (sixty) minimum wages, provided for in PGFN Public Notice No. 16/2020;
• the possibility of individual settlement, under the terms provided for in PGFN Ordinance No. 9,917/2020;
• the possibility of entering into a Procedural Legal Transaction for the resolution of registered debts, under the terms of PGFN Ordinance No. 742/2018.

The institute of the “settlement agreement” was regulated by the Compliant Taxpayer Law (Law No. 13,988/2020). In the case of debtors opting for Simples Nacional, the possibility of entering into the settlement was approved by Supplementary Law No. 174/2020.

* On October 1, during a virtual press conference held by the PGFN regarding the Fiscal Recovery Program, the Attorney-General of the National Treasury, Ricardo Soriano de Alencar, remarked that the previous system of periodic and temporary programs for the refinancing or installment payment of debts, popularly called “refis,” are “archaic, old, outdated” instruments, since they offer the possibility of joining in a “linear” manner, without considering whether or not the debtor has the financial capacity to pay without the granting of a benefit.*

In Soriano’s assessment, the old “refis” model is like offering the same medication ostensibly to everyone who is in a hospital, whether they are patients, visitors, doctors, etc., sick or not. In the settlement agreement, on the other hand, the remedy is used only by the patient who, based on his diagnosis, really needs treatment. “The refis is not the best path. The tax settlement, on the other hand, is. It is a great evolution,” he said.

Also at the press conference, the Special Advisor to the Minister of the Economy, Guilherme Afif Domingos, emphasized that Brazil today has around 1.1 million micro and small businesses with debts that may be renegotiated by means of the PGFN’s settlement agreements.

However, Afif recalled that this public needs to be informed about the possibilities of agreement so that they can regularize their situation.

For this reason, he reported that he requested the support of the Brazilian Micro and Small Business Support Service (Sebrae) in publicizing the Program. Regarding the instrument of the settlement agreement, Afif commented: “We need to treat unequals unequally, according to their inequalities. Treating unequals equally does not work.”

Source: Ministry of the Economy