Planalto expectation is that the minister decides whether the decree that increased the tax is valid or not before the bimonthly report of revenues and budget expenses
The government of President Luiz Inacio Lula da Silva (PT) is awaiting a decision by the Supreme Court Minister Alexandre de Moraes on the decree that increased by the IOF (Tax on Financial Operations) by July 22. It is the day when the economic team will disclose the bimonthly report of revenues and expenses.
Depending on Moraes’ response to the AGU (Advocacy General of the Union) of this Thursday (15.Jul.2025) In order for the decree to be re-established immediately, the government will need to present a greater or lower freezing in the report.
The request was made at a conciliation hearing with the Supreme Congress. Union’s general lawyer, Jorge Messias, declined to negotiate with the legislature representatives and asked Moraes to decide on the matter. The government says its decree is constitutional and must be valid.
“It was requested the granting of the claimed precautionary measure, aiming at the immediate full restoration of the term of Decree 12.499/2025. The measure is of fundamental importance for the principle of separation of powers to be restored.”said Messiah in an official note after the meeting ,.
According to the Poder360Planalto expects the decision to leave in the coming days for the urgency of the matter. If the injunction leaves very close to the disclosure, the government should freeze a higher share of the budget, as technicians take a long time to consolidate the data.
The Minister of Finance, on May 23 who changes the decree on the increase in IOF (tax on financial operations) will have fiscal impact of R $ 2 billion in 2025. He stated that the federal government could announce additional contingency in expenses.
In practice, the AGU movement plays pressure to the judiciary, which will have to decide on the subject.
Without the injunction, Moraes would have more comfort to wait until August before giving a solution to the impasse. Now you have to say whether or not this provisional decision grants.
A decision of Moraes in favor of the government has the risk of causing an indisposition with Congress to overthrow the decision of deputies and senators who mostly vetoed the increase in the IOF intended by Fernando Haddad and President Lula.
When he had to decide on the issue for the first time, the minister both the Government decree and the congressional measure that overthrew them, that is, keeping the scenario unchanged. Now you will have to decide on behalf of one side or the other.
The STF minister is one of the most criticized on the right, with more radical sectors proposing his impeachment. If Moraes overthrows the legislature’s decision on IOF, it will increase a little more the indisposition of deputies and senators against the magistrate.
Chamber Presidents Hugo Motta (Republicans-PB), and Senate, David Alcolumbre (Brazil-AP Union), hope Moraes will not make any decision before Congress himself will present a solution, which should only happen in August because of the legislative recess.
Motta and Alcolumbre have already shown a menu of possible expenses for the economic team, as well as options to increase collection, such as the distribution of BNDES dividends to the federal government.
The government, however, argues that its decree to raise the tax is constitutional and its overthrow hurts the principle of separation of powers.
The minutes of the meeting of this 3rd (15.Jul) says that the Senate law firm has asked for more time for negotiation. Already the Lula government left the determination in the hands of the Supreme Court. Here’s (PDF – 58 kb).
The text states that Moraes “Asked if there would be possible reciprocal concessions that could result in conciliation”. Soon after, the document says the government chose to maintain the judicialization.
“Those present said that, despite the importance of dialogue and initiative of this hearing, they preferred to wait for the court decision.”lê-se na ata.
Jorge Messias published a statement after the meeting. Argued that the movement came aligned with the determinations of the Ministry of Finance, commanded by.
“The measure is of fundamental importance for the principle of separation of powers to be restored”said the minister in the note. This is (PDF – 18 kb).
Conciliation hearings are held so that those involved in a case try to reach an agreement before a court decision.
The IOF IDE
The Lula government wanted to get the financial tax to strengthen the collection and avoid budget freezes. Congress and the business community reacted mass against the determination.
A and decided to overthrow the text that increased the IOF on June 25.
In the Casa Baixa, they were 383 votes in favor revocation and 98 contra. The legislative decree with the new standards is the number. In the Senate, the vote was symbolic – nominal counting.
The case is in the Supreme. Court Minister Alexandre de Moraes who raised the IOF as to the text approved by the congress that overthrew the measure.
Moraes also summoned the conciliation hearing on the issue. The meeting is held for the parts of a process to agree on the subject.
The deputies and senators overthrew Lula’s decrees for considering abusive texts. In addition, they mentioned that the IOF has regulatory function and could not be used to raise.
The economic team argues that it is their function to define the rates. According to Haddad’s team, the main point of the decree was not to raise public revenue.
Read a chronology with the main developments of IOF’s impasse:
- – In the afternoon, the economic team increases the IOF via decree to strengthen the collection. Estimated impact is R $ 20.1 billion in 2025;
- – Near the dawn, farm reviews part of the decree. Collection in the year decreases to R $ 19.1 billion;
- – After meeting, alcohubre and Motta give Haddad 10 days to present alternatives to the IOF decree;
- – A new meeting is held. Haddad announces that it will reduce IOF’s discharge and send provisional measure with increased other taxes to compensate. The impact of the decree for 2025 drops to around R $ 12 billion;
- – Haddad launches provisional measure with increasing other taxes and with changes in tax compensation. Farm expects to strengthen collection by approximately R $ 10 billion in 2025;
- – Chamber approves urgency for voting the project to overthrow the discharge of IOF;
- – By surprise, Motta announces the project vote at 11:35 pm on a social network;
- – House approves the decree fall by 383 votes in favor and 98 against;
- – Senate drops in symbolic vote (without voting count);
- – Government officially triggers the Supreme Court to judge the impasse.
