Brazil Finalizes R$50–60 Billion Fiscal Plan While Extending Fuel Subsidies

Overview

• The government is preparing a complementary-law bill that officials say will yield roughly R$50–60 billion in 2027 by tightening spending rules, revising tax expenditures and temporarily excluding extraordinary oil and gas revenues from spending-floor calculations.
• Bruno Moretti told senators on Wednesday, Nov. 11 that the measures would 'rationalize some expenses' and that removing petrol and gas windfalls from the bases that set health and education floors would be applied through 2030.
• The executive extended zero federal taxes on gasoline and PIS/Cofins on ethanol and will keep an extra ethanol subsidy through December 9 at an estimated cost of R$3.57 billion while diesel importer subsidies are expected to be renewed.
• Markets and investors on Faria Lima judged the package as incremental, saying it lacks clear, structural cuts and that its reliance on revising tax incentives and temporary rules leaves credibility doubts for rates and currency normalization.
• A governance strain inside law enforcement and pending Supreme Court steps — including the Justice minister's demand for explanations about PF changes and Justice Edson Fachin's request for a PF technical report — add short‑term political risk that could complicate implementation.