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4d ago

Lula Signs Law to Cut Tax Breaks and Raise Sector Levies, Vetoes Revival of Canceled Emendas

Congress will revisit the vetoes after the February recess.

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O presidente Luiz Inácio Lula da Silva sancionou, com vetos, a lei que reduz benefícios fiscais e amplia a tributação sobre bets, fintechs e Juros sobre o Capital Próprio.

Overview

  • The complementary law, published in an extra edition of the Official Gazette, mandates at least a 10% reduction in selected federal tax incentives.
  • The measure raises taxes on targeted sectors, lifting betting firms’ rate from 12% to 15% by 2028, increasing fintechs’ CSLL from 9% to 12% in 2026 and to 15% from 2028 (with higher steps for larger fintechs), and moving JCP withholding to 17.5%.
  • The government projects roughly R$20–22 billion in additional 2026 revenue to support its fiscal goal, with part of betting receipts earmarked to social security rising from 1% in 2026 to 3% from 2028.
  • Lula vetoed the congressional provision to revalidate around R$1.9 billion in ‘restos a pagar’ emendas, including about R$1 billion linked to RP‑9, citing a precautionary decision by Supreme Court minister Flávio Dino.
  • A separate article imposing rigid conditions on financial or credit incentives was also vetoed, while the law adds a 2% of GDP cap on new tax benefits and shields programs like Zona Franca de Manaus, Prouni, Minha Casa Minha Vida and the basic food basket from cuts.