Overview
- A Special Commission of the Chamber of Deputies approved PEC 231/2019, with the symbolic vote taking place on Thursday, July 2, 2026, and the text now moving to the Chamber plenary and later the Senate.
- The proposal adds two Constitutional Funds that each receive 1% of federal revenue from Income Tax, IPI and the new Imposto Seletivo, with the Southeast’s allocation phased as 0.5% in 2027 and the remaining 0.5% in 2028.
- The PEC raises the municipal transfer (Fundo de Participação dos Municípios) by one percentage point of IR, IPI and Imposto Seletivo receipts, with the extra payment scheduled for the first decennial of March each year.
- Funds would be managed by regional development banks and used to make lower-interest loans prioritizing cooperatives, family farming and small industries in low-income municipalities rather than direct transfers to state coffers.
- Relator Arnaldo Jardim estimates a fiscal cost of R$49.67 billion over 2027–2028 (R$16.0 billion in 2027 and R$33.6 billion in 2028), the Finance Ministry has not commented, and debates in the plenary and Senate are likely to focus on affordability and effects on transfers to other regions.