Lula Signs Fiscal Law With Vetoes, Trimming Incentives and Raising Taxes on Bets, Fintechs and JCP

Overview

• The president removed a clause that would have revalidated canceled ‘restos a pagar’ from 2019 onward, aligning with an STF precautionary ruling by Justice Flávio Dino that flagged legal uncertainty, with estimates around R$1.9 billion tied to the affected amendments.
• Tax measures in the new law raise the levy on betting operators from 12% to 15% by 2028, increase the CSLL for fintechs to 12% through 2027 and 15% from 2028, and lift withholding on interest on equity (JCP) to 17.5%.
• The statute imposes a 10% linear reduction in federal tax incentives and sets a 2% of GDP ceiling for total incentives, requiring beneficiary estimates, performance targets and monitoring for any new or extended benefits.
• Exemptions in the text cover programs such as regional development funds, the Manaus Free Trade Zone, Prouni, Minha Casa Minha Vida and the basic food basket incentives.
• The government projects roughly R$20 billion in additional 2026 revenue to support a R$34.3 billion surplus target, and industry group CNI opposed key provisions after urging vetoes that were not granted.