Chamber Approves PEC Expanding Tax Immunity for Churches

Overview

• The Chamber of Deputies voted to approve the constitutional amendment on Thursday, May 28, passing it in both first and second rounds and forwarding the text to the Senate for review.
• The PEC would extend constitutional tax immunity to purchases of goods and services deemed “necessary” for the implantation, maintenance and functioning of churches and related institutions such as creches, asylums, orphanages and therapeutic communities.
• Parliamentarians removed several safeguards that had been negotiated with the Ministry of Finance, leaving key limits, lists of covered goods and oversight rules to be defined later by a law complementary, which critics say creates legal uncertainty.
• Lawmakers and analysts warned the change could have a fiscal cost and shift tax burdens to the public, with the relator estimating about R$1 billion a year while some government estimates range higher and project effects on consumption tax rates.
• The move split parties in the Chamber along government and opposition lines and sets up a contested debate in the Senate over compensations, eligibility rules and anti‑abuse controls before any implementing law takes effect.