Overview

• Fernando Haddad is expected to take to President Lula this week a package that seeks fast revenue via decrees and an urgent bill to restore key elements of the failed measure.
• The estimated shortfall totals about R$46 billion through 2026, with roughly R$31 billion in lost receipts and R$15 billion from spending cuts that did not occur.
• For 2025, the government is weighing a larger budget spending block, now at R$12.1 billion, alongside selective reductions in non‑mandatory outlays while protecting priority social programs and investments.
• Measures under study include retroactive taxation of sports betting that operated before regulation and new limits on large companies’ tax compensation.
• Officials attribute the defeat to moves by Centrão parties such as PP and União Brasil, Lula signals tougher rhetoric on taxing high‑profit sectors like fintechs, and the fiscal target remains intact.