Brazil Races to Pass Tax MP as STF Fast-Tracks Ficha Limpa Case and Methanol Probe Widens

Overview

• MP 1.303 cleared a mixed committee by 13–12 and must pass both the Chamber and Senate by midnight on Oct. 8, with Finance Minister Fernando Haddad saying an inter‑house voting agreement was reached.
• Concessions to secure votes kept LCI/LCA tax exemptions and dropped a proposed hike on betting taxes, cutting the 2026 revenue estimate to about R$17 billion from more than R$20 billion.
• The text sets a uniform 18% income tax on financial investments, raises CSLL for payment institutions to 15%, lifts tax on JCP to 18%, creates a Litígio Zero Bets repatriation program and offers a route to regularize undeclared virtual assets.
• Dissent persists as six lawmakers from parties with government ministers voted against the MP in committee, and Senator Renan Calheiros warned the Senate will not simply validate Chamber‑driven changes.
• STF Justice Cármen Lúcia ordered President Lula and Congress President Davi Alcolumbre to explain recent Ficha Limpa changes within five days under an expedited procedure, while federal and state authorities intensified methanol poisoning investigations, flagging 30 establishments and reporting at least ten deaths in São Paulo after a large bottle seizure.