Senate approves reduction of tax benefits and greater taxation of betting and fintechs; see what changes

BRASILIA – THE Senate approved, on the night of Wednesday 17, by 62 votes to 6, the main text of the Complementary Draft Law (PLP) 128/2025, which reduces tax benefits by 10%, also recovering points from the so-called “BBB taxation” (banks, bets and billionaires).

The senators even analyzed a highlight, but this separate section was rejected and the project ended up being approved without any change in merit and, therefore, passes to presidential assent, without having to return to the Bedroom.

The project that linearly reduces the government’s tax benefits guarantees approximately 22.45 billion reais for the 2026 budget and is necessary for the vote itself on the Annual Finance Law (LOA) next year. Its approval is treated as a priority for this end of the year by the Ministry of Finance.

What is the expected impact

The new law is expected to generate additional revenue of 22.45 billion reais in 2026, surpassing the 20 billion reais target needed for the primary surplus. Discover the changes in each sector:

1. Paris

Taxation on betting will increase from 12% to 15%, gradually until 2028.

The rule: The government will reduce the share that companies can keep for financing (currently 88%).

Escalation: The retention rate will fall to 87% in 2026, 86% in 2027 and 85% in 2028. The difference will go to Social Security.

Crime: The text also punishes anyone who advertises illegal betting houses in the country.

2. Fintechs

The rate of Social Contribution on Net Profit (CSLL) for fintech, which currently represents 9%, it will increase considerably:

2026 and 2027: It amounts to 12%.

From 2028: It amounts to 15%.

For other financial institutions (credit and financing): the rate rises to 17.5% (until 2027) and 20% (from 2028).

3. Interest on equity (JCP)

Investors who receive company profits through JCP will pay more Income tax. The withholding tax rate will increase from 15% to 17.5%.

JCP is a way for companies to distribute profits to shareholders while paying less corporate tax. The Novo party tried to cancel this increase, but was defeated by 286 votes to 116.

Reduction of tax benefits

The text imposes a linear reduction of 10% in several federal tax advantages (PIS/Cofins, IPI and CSLL, among others).

Shelf life: The new benefits will be valid for a maximum period of 5 years.

Roof: It is prohibited to create new incentives if the total tax exemptions exceed 2% of the Gross domestic product (GDP).

Exception: Under the presumptive profit regime, the reduction only concerns companies with gross turnover above R$5 million (the previous ceiling was R$1.2 million).

According to the rapporteur, the reduction in benefits constitutes the main source of income for the plan, representing 17.5 billion reais of the total collected.

Which amendments were rejected?

The senator Randolf Rodrigues (PT-AP) had read its opinion at the beginning of the evening, in plenary, and had kept the text as it had appeared at the Chamber, rejecting all the amendments presented which would alter the substance and accepting only two formal amendments.

The amendments which would modify its content were intended to exclude specific sectors, to preserve differentiated tax regimes or to modify structuring provisions of the text approved by the Chamber.

“I believe in the rejection of all amendments, in order to preserve the integrity of the main text and to ensure the full achievement of the fiscal and institutional objectives of the proposal,” Randolfe’s report states. “In order to provide greater clarity, normative precision and improvement of legislative technique, editorial amendments are presented, without changing the material content of the project,” he adds.

The First Amendment amended Art. 1st of the text, specify that the incentives and advantages of a tax, financial or credit nature treated are those granted “exclusively” within the framework of the Union.

The second editorial amendment amended art. 12, to establish that the provisions of the future law concerning the conditions for the extension of benefits which result in tax exemptions do not apply to any extension of “deductions” under the Tax on Universal Bases (TBU) system.