Lula Signs Chronic Debtor Law, Vetoes Key Breaks for ‘Good’ Taxpayers

Overview

• President Lula sanctioned the Devedor Contumaz statute with five vetoes published in the official gazette.
• Struck provisions include discounts of up to 70% on fines and interest and the use of tax losses and negative CSLL base to cover up to 30% of debts for top‑rated taxpayers in the Sintonia program.
• Lula also vetoed extending installment plans to 120 months, citing limits tied to fiscal law that cap such terms at 60 months.
• A separate veto removed flexibility to accept or swap guarantees, including replacing judicial deposits with surety bonds or capacity‑based collateral, due to risk to the Union.
• The core law stands, defining chronic tax debtor penalties and sector rules, while Receita and business groups look to implement compliance programs like Sintonia and explore alternatives such as a CSLL “adimplência” bonus despite earlier pleas from nine pro‑business caucuses for no vetoes.