Brazil tax auditors’ strike – a story of state-funded privilege, old inequalities and 2026 election

SAO PAULO (ICIS)–Brazil’s trade union representing auditors at the Federal Revenue service, which are some of the best-paid civil servants in the country, accepted late on Monday the court’s ruling ordering the end of their nearly seven-month strike, said Sindifisco.

• Ruling ends what most Brazilians just saw as state-fueled privilege
• Striking workers average salary: $5,000/month; Brazil’s median: $400-500/month
• The strike had started affecting the state’s tax collection

While the judge’s ruling ordering the end of the strike was published over the weekend, as of Monday morning Sindifisco maintained it had not been officially notified yet.

In a written response to ICIS late on Monday, the union said it had been notified and in compliance with the “democratic state of law” it would accept the ruling, but did not disclose any details about more industrial action for coming weeks.

The ruling put an end to one of the longest strikes by civil servants in Brazil, started in November, and a case which has showed some of Brazil’s wrongs – civil servants paid multiple times more than the average Brazilian, complaining about the lack of salary increases.

The Federal Revenue auditors have mostly fought this battle alone, and along the way they did not gain any new friends.

For the government, the ruling puts an end to a dispute which was becoming increasingly negative for the economy – goods piling up in customs points across Brazil’s vast geography – as well as the state’s ability to collect the taxes due on imports and exports.

Finance Minister Fernando Haddad said in parliament in May that the strike was partly to blame for the lower-than-expected tax proceeds for 2025. The pressure was building up while Sindifisco was becoming increasingly isolated in its battle.

Chemicals and fertilizers players, as well as most industrial companies, will have breathed a sigh of relief over the weekend as their concerns about trade flows had for months been increasing.

The hangover from such an extended period of industrial action is expected to be tedious and things will take months, rather than weeks, to normalize, most analysts think.

TIPPING POINT
As their demands kept falling in deaf ears with the government, Sindifisco stepped up the pressure in early June, calling for an even stricter industrial action.

It proved lethal for its demands. The cabinet quickly puts its lawyers to work and convinced a judge that the latest strike action was affecting essential services that the state is mandated to deliver, as well as tax receipts.

To make sure Sindifisco came around quickly, the judge’s ruling set a daily fine of Brazilian reais (R) 500,000 ($90,100) in case of non-compliance by the union.

“Sindifisco states that it was formally notified today [Monday 9 June] of the preliminary decision of the Superior Court of Justice (STJ) granted by Judge Benedito Goncalves and, respecting the democratic rule of law, it will respect the ruling,” it said in its written statement late on Monday.

“The essential activities carried out by the auditors will be protected, including the suspension of standard operations in customs units.”

In his ruling, the judge specifically mentioned “standard operations”, which is nothing but a euphemism which means auditors do still go to work and in theory carry out their tasks, but they do so at a much slower rate, amounting practically to strike action as workloads pile up.

Sindifisco said its legal affairs department is evaluating “all applicable legal measures” to discuss the court decision.

However, it did not respond to questions about what its next strategy could be based on, considering they have exhausted practically all industrial actions possible, without succeeding in their demands.

The union’s main demand is hefty increases in wages to recoup the losses in purchasing power accumulated since 2016, as they claim their wages have been increased only once since 2016.

But even that clear and rather unfair circumstance has not moved public opinion, political parties or the cabinet to the striking workers’ turf. The reason not difficult to find: their already very generous, taxpayers-funded wages.

STATE-FUNDED PRIVILEGE
A Federal Revenue auditor’s salary averages R28,000/month ($5,000/month), gross before taxes and social security contributions, according to the Brazilian branch of jobs site Glassdoor.

That, in Brazil, is earned by less than 1% of the population. To make matters worse, those salaries are paid by all taxpayers, most of whom must endure low salaries and long days at work – or take on two jobs – to make ends meet.

Wages for most Brazilians range between R1,518/month – the legal minimum wage, widely common in services jobs such as bars or shops – and around R3,000/month.

The auditors’ salaries, which can also be found in other high-ranking civil servant positions, represent for many Brazilians the centuries-old, state-funded privilege which tends to be concentrated among white Brazilians who come from high-income households and, almost certainly, went to the country’s best universities.

The 1950s idea of a new capital, Brasilia, which would be able to bring together a modernized and more inclusive version of all Brazils was a lovely idea on paper – which mostly stayed in the papers of idealists such as famous architect Oscar Niemeyer and his disciples.

As the decades went by, old habits died hard, and Brasilia became a weird version – for good and bad – of the Brazil they were trying to change. Many of those Brasilia-based, well-paid civil servants have come to live in bubbles and are seen by most Brazilians as some sort of state-sponsored caste.

No wonder the auditors’ plea… was never taken too seriously for most Brazilians or even considered just a bad joke. Opinion polls have been telling that story for months, but  Sindifisco seemed to fail to grasp the public’s mood and kept pushing.

After the weekend’s ruling gave it the upper hand, the cabinet will be even less inclined to make any concessions now as it tries to rein in the fiscal deficit while keeping a good face in terms of welfare state spending, a difficult balance to start with.

But any public opinion’s perception that the cabinet was giving in would have added to an extended belief about some civil servants: they have it better than most private sector employees, not least because their jobs, once they passed exams and obtain the qualifications, are practically secured until retirement. A generous state pension follows.

EXPECTED COMPETITIVE ELECTION
Brazil will soon enter an unofficial, year-long electoral campaign as its nearly 160 million voters will be called to the polls to choose a president and renew parliament in October 2026.

Lula’s Workers’ Party (PT) and its governing coalition appear to have slim chances to revalidate their mandate as the PT’s core voters – low-income households – have greatly felt as of late the increase in basic items such as food, as a larger share of their spending goes to that.

The government will not want to upset any potential voters by appearing to favor already privileged civil servants. The election could literally be decided by a few thousand votes, so any potential voter turning away would not be good news for the PT.

To make things more confusing, the PT has yet to officially choose a presidential candidate as its hegemonic leader of the past three decades – Lula – keeps the incognita when enquired about it.

And that is a rather strange circumstance, especially as the age of another President, that of US’ Joe Biden, became part of the public conversation after his debate debacle in June 2024.

Be it because the Brazilian center-left has not been able to find a successor with the same appeal than Lula or be it because in Brazil’s idiosyncrasy blasting old age is considered rather rude, Lula’s age has not become part of the debate yet, at least to the same extent than it did in the US.

Another strange circumstance as the signs of aging are evident for all to see.

Biden was 81 during the debate. Lula would be 80 if he runs for re-election at the time of the poll but, if victorious, he would be sworn into office for a fourth term when he will have already turned 81.

Front page picture source: Brazil’s Federal Revenue press services

Focus article by Jonathan Lopez