The Chamber of Deputies approved, in the early hours of this Wednesday (16/12), the basic text of the Supplementary Bill (PLP) which proposes reductions in tax advantages. The text provides for a reduction in tax incentives of 10% over two years, including 5% in 2025 and an additional 5% in 2026.
The text is part of a package defended by the Minister of Finance, Fernando Haddad, to compensate for the reversal, in October, of the Provisional Measure (MP) alternative to the increase in the Financial Operations Tax (IOF). Government supporters are betting that the proposal will be voted on in the Senate this Wednesday (17/12), which will allow the vote on the budget to be completed this year.
The package is structured around three axes: reducing spending, reducing tax benefits and increasing taxation on betting and fintechs. The initial idea was to address the last two points in separate projects, but the head of the government’s economic team was in person in the Chamber, Tuesday (16/12), to articulate the opinion with the rapporteur, deputy Aguinaldo Ribeiro (PP-PB), and with the President of the Chamber, Hugo Motta (Republicanos-PB).
Haddad estimates an increase in revenue of 20 billion reais, the amount needed to close the 2026 budget and make viable the fiscal target of a surplus of 0.25% of gross domestic product (GDP), around 34 billion reais. However, rapporteur Aguinaldo Ribeiro did not detail the total budgetary impact of the project.
Benefit reductions apply to the following taxes:
- Social integration program / Training program for active civil servants (PIS/Pasep) and PIS/Pasep-Import; Contribution to the Financing of Social Security (Cofins) and Cofins-Import;
- Corporate tax (IRPJ) and Social Contribution on Net Profit (CSLL);
- Import tax;
- Tax on industrialized products (IPI);
- Social security contribution of the employer, the company and the entity that corresponds to it.
Taxation of betting and fintechs
The text establishes that 3% of net revenues from fixed odds betting will be allocated directly to Social Security, maintaining the 12% already provided for in the regulatory framework for the sector, approved by Congress in 2023. Betting operating companies will now retain 85% of profits, compared to 88% previously.
In the rise of CSLL, the text also affects fintechs. Taxation will be 12% until December 31, 2027 and 15% from January 1, 2028.
The government expects a relief of 1.6 billion reais.
Interest on equity
The text determines that interest paid or credited to a beneficiary, such as interest on equity (JCP), will be subject to income tax withheld at source at the rate of 17.5%. Today, this percentage is 15%. According to the rapporteur, this measure would allow the government to raise 2.6 billion reais.
Amendments
The proposal proposes a change to the rules for unpaid amendments, which are budgeted expenses not paid in previous years. From now on, the amounts recorded from 2019 and which have been canceled can be revalidated and reimbursed by the end of 2026. If the money is not enough for all projects, organizations will be able to pool resources from different sources to prioritize structural work.
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