The Chamber of Deputies approved a request to withdraw Provisional Measure (MP) 1303/2025 from the voting agenda.
The mixed commission responsible for analysing the provisional measure regarding the taxation of financial investments and virtual assets (MP 1303/2025) was installed in July. The measure was forwarded to the National Congress in June to compensate for the revocation of the increase in the Tax on Financial Transactions (IOF).
Issued on June 11, MP 1.303/2025 was part of the federal government’s effort to balance public accounts following the repeal of decrees that increased the IOF. As well as an increase on the tax burden for online gambling operators the text provided, among other points, for the standardization of the Income Tax rate at 17.5% for various financial applications and crypto assets, and a 5% tax on income from investments that are currently exempt.
The MP needed to be approved by Wednesday (October 8) to remain effective. With its removal from the agenda, the text expired meaning that it has effectively been blocked. The vote resulted in 251 votes in favour and 193 against the request and is a major setback for the administration of Luiz Inácio Lula da Silva
Earlier, Finance Minister Fernando Haddad had urged Congress to fulfil the agreement made with the federal government for the approval of the MP. Haddad stated that the government had maintained dialogue with lawmakers and made concessions.
The rapporteur of the MP, Carlos Zarattini, argued that he had addressed nearly all requests from the lawmakers.
“We worked for 120 days to ensure the approval of the MP. We made progress on several points, met many demands, and created a text that had all the conditions to be approved in this House and sanctioned by the President of the Republic—a consensus text,” he said.
On the same day as the vote in the Lower House the congressional joint committee responsible for drafting MP 1303/2025 removed the proposed tax increase from 12% GGR to 18% GGR on operators retaining the original rate of 12%. Haddad announced a new charge for betting companies. According to Haddad, they would have to pay a retroactive fee of 30%. This amount would be made up of 15% taxes and another 15% fine, relating to the period in which they operated without taxation in the country and going back to 2014. Haddad explained that the repatriation of funds was expected to generate R$5 billion in revenue, which would be equivalent to three years of collection if the original measure to raise taxes on GGR proposed by the government had been approved.
However the Chamber of Deputies rejected the new version of the MP in its entirety.
As well as increased taxes on betting operators the original version of the MP proposed the taxation of billionaires, banks along with taxing certain financial investments.
According to the Agência Brasil, the initial expectation was to raise about R$ 10.5 billion in 2025 and R$ 21 billion in 2026. After negotiations, the projection fell to R$ 17 billion.
The funds were intended for the budget as a way to meet the surplus target. The proposed budget for 2026 has a surplus target of R$ 34.3 billion.
The leader of the ruling party the Workers’ Party (PT) in the Chamber of Deputies, Lindbergh Farias, stated that there was a breakdown of the agreement with the withdrawal of the MP from the voting agenda.
“We consider what is happening here today an act of sabotage against Brazil. From the rapporteur’s side, there was patience to discuss a substantive agreement, but what was clear to us is that there was a will to impose a political defeat on Brazil, not on President Lula,” said Lindbergh during a press conference.
With the MP’s failure to pass, the government is expected to impose new spending cuts for 2025. The estimated loss in revenue is R$ 35 billion in 2026.
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The Chamber of Deputies approved a request to withdraw Provisional Measure (MP) 1303/2025 from the voting agenda. The mixed commission responsible for analysing the provisional measure regarding the taxation of financial investments and virtual assets (MP 1303/2025) was installed in July. The measure was forwarded to the National Congress in June to compensate for the…
The post Lawmakers reject measure to increase taxes on operators in Brazil appeared first on G3 Newswire.