The government wants to resume the discussion on exempt bonds and debate corporate taxation in 2026

This can be done under new leadership within the Ministry of Finance. Minister Fernando Haddad is expected to leave office at the end of February with the intention of collaborating in President Lula’s re-election campaign, and the current prospect is that number 2, Dario Durigan, will take over.

If successful, part of the initiatives could contribute to meeting the challenge of achieving a public accounts surplus in 2026. This will be the first time that the Lula government will have to obtain a positive result during its third term, without already taking into account target deductions, such as court decisions. The target is a surplus of 0.25% of gross domestic product (GDP), or 34.3 billion reais. In previous years, the tolerance margin for the target was insufficient; it will now be zero.

The Selective Tax is priority number 1, as it will come into force in 2027. Also known as the “sin tax”, the regulatory tax was created by the reform of the consumption tax to discourage the acquisition of goods and services harmful to health and the environment, such as cigarettes, alcoholic and sugary drinks and extracted mineral resources.

The definition of selective rates will also be important to calibrate the Contribution on Goods and Services (CBS), the federal part of the Value Added Tax (VAT) created by the reform, which also comes into force in 2027. The values ​​will be higher than the normal VAT rate.

At the same time, the government’s intention is to insist on discussing the end of exempt securities, such as LCA and LCI. This is one of the most controversial proposals of the Provisional Measure (MP) issued to replace part of the fiscal effect of the increase in the Financial Operations Tax (IOF), which lost its validity without Congressional analysis.

The resistance mobilized different economic groups, but provoked heavy complaints from the agribusiness and the real estate market, because the end of the exemption tends to make financing the sectors more expensive.

The economic team, for its part, is convinced of the need to end the exemption due to the asymmetry created by other securities, including public debt securities. National Treasury Secretary Rogério Ceron has already stated that competition from exempt bonds hampers the process of refinancing public debt.

Even though the year is short, there is still interest in starting the debate on corporate tax reform. Topics such as the discussion of payroll taxes and interest on equity (JCP) are among the topics to be discussed.

In 2023, the government even proposed the end of the JCP, a way to distribute profits to shareholders who deduct this amount from corporate taxes, but the initiative was blocked in Congress. An alternative on the table is the European model which links this advantage to efficient investment that increases the company’s capital. The gap between the different types of corporate taxation is also on the agenda.

In these cases of corporate taxation, the logic is to give a critical mass to the debate so that the subject becomes more mature and can move forward effectively within the next government. Another debate expected to be addressed next year is the taxation of cryptoassets.

At the end of 2025, the Central Bank regulated this market and classified part of the operations as foreign exchange operations, which opens up space for the impact of the IOF, for example. In this case, it would depend solely on administrative acts, without going through Congress.