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1h ago

Brazil’s Lower House Fast-Tracks Bill to Trim Federal Tax Breaks by 10%

Leaders are pushing a vote to lock in roughly R$19.8 billion for the 2026 budget under rules that require approval this year.

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Overview

  • Hugo Motta said he intends to put PLP 128/25 on the agenda this week or early next week as part of a pre-recess package.
  • Aguinaldo Ribeiro, newly named as rapporteur, is finalizing his report in coordination with the economic team after being tapped to move the bill quickly.
  • The text requires at least a 5% reduction in federal tax, financial and credit incentives in 2025 and another 5% in 2026.
  • The government is negotiating to use the bill as a vehicle for elements of its plan, including a change to presumed-profit rules projected to raise about R$8 billion of the roughly R$19.8 billion total in 2026.
  • The draft preserves exemptions for basic food items, Simples Nacional, the Manaus Free Trade Zone, tech and semiconductor policies, regional incentives in the North, Northeast and Center-West, philanthropic entities, parties, unions and scholarship programs.