Brazil’s Chamber Approves Law Targeting Chronic Tax Debtors

Overview

• Deputies passed PLP 125/2022 by 436 to 2, preserving the Senate text so it proceeds directly to presidential sanction.
• At the federal level, a chronic debtor is defined as having unjustified tax debt above R$ 15 million and exceeding 100% of known assets, with distinct repetition thresholds for states and municipalities.
• Sanctions include making a company’s CNPJ inactive, barring access to public procurement and tax incentives, and blocking entry into or continuation of judicial recovery in cases of structured fraud, with due administrative process and defense.
• The framework pairs penalties with cooperative compliance programs such as Confia and Sintonia, offering prior self-regularization, risk classification, and bonuses for consistent on-time taxpayers.
• Supporters cite major investigations like Carbono Oculto and say the regime targets organized schemes that distort competition, with Receita data pointing to roughly 1,200 CNPJs tied to about R$ 200 billion in debts over a decade.