Lula sanctions the reduction of tax benefits, but vetoes a section that would revive the 1.9 billion reais amendments | Brazil

Among the vetoes is an article that allowed unprocessed unpaid balances, recorded from 2019 and canceled, to be revalidated and settled by the end of 2026. To justify the removal of the article from the text, the government claimed that the measure would generate legal uncertainty due to a decision rendered by the Federal Court (STF).

The government veto is in line with the December 21 decision of STF Minister Flávio Dino, who suspended this article approved by Congress to restore payment for unresolved parliamentary amendments. The approved text would settle 1.9 billion reais in amendments to unpaid payments by the end of fiscal year 2025, including 1 billion reais referring to the rapporteur’s amendments.

“The legislative proposal goes against the public interest, generating legal uncertainty regarding the possibility of executing the remaining payments mentioned in the provision, due to a decision taken in the form of a precautionary measure by Order No. 40.684/DF, by the Supreme Federal Court,” informs the government to justify the annulment of the article.

Another provision removed from the text is the one that allowed legislative proposals that deal with the granting, expansion, extension or extension of financial or credit benefits to meet requirements that are not compatible with the specifics of design and implementation of these benefits, “which would harm the realization of relevant public policies of social interest financed by them”.

With the sanction of this law, the government hopes to obtain revenues of 20 billion reais, which is essential for the economic sector to pursue next year’s budgetary objective.