The Chamber of Deputies removed from the agenda, this Wednesday (8), Provisional Measure (MP) 1,303/2025, which replaced the original increase in the Tax on Financial Operations (IOF) with an increase in the rates of other taxes. Without approval, the measure automatically expires, making analysis by senators unfeasible.
Due to the score of 251 to 193, parliamentarians decided to remove the proposal from the agenda, which, in practice, means its expiry, as the text would lose validity at the end of the day. The economic team estimates that the decision will cause a loss of R$42.3 billion in public accounts by 2026.
The decision, strongly supported by Centrão and the ruralist bench, represents a significant defeat for the government of President Luiz Inácio Lula da Silva, who considered the measure essential to close the 2026 Budget.
FREE LIST
10 small caps to invest in
The list of stocks from promising sectors on the Stock Exchange
The text, sent by Palácio do Planalto in June, needed to be approved in the plenary sessions of the Chamber and Senate by 11:59 pm this Wednesday to not lose validity.
A (7) in a mixed committee by a narrow margin — 13 votes to 12 — but faced strong resistance from parliamentarians who criticized the measure’s impact on productive sectors.
According to calculations by the Ministry of Finance, the rejection of the MP represents a minimum loss of R$17 billion in revenue next year. The proposal was part of the tax compensation package after the judicial reversal of the IOF increase and was considered essential for closing the 2026 Budget.
Continues after advertising
The government argued that the measure did not penalize workers or the majority of the population, but sought to “call to responsibility” the richest 1%, guaranteeing resources to maintain fiscal balance and finance social policies.
Planalto tried to reverse the scenario
Before the vote, , but was unable to reverse the opposite articulation. The resistance, however, proved stronger than the base.
With the withdrawal from the agenda, the government is now evaluating new alternatives to compensate for the loss of revenue, possibly through bills or tax decrees.
Continues after advertising
Earlier, the proposal’s rapporteur, Carlos Zarattini (PT-SP) stated that the government will have to look for alternatives to compensate for the loss of revenue, possibly through new bills or tax adjustments.
“There are several things that can be done by decree. There are definitions of rates that do not require law, such as IPI and IOF. The Supreme Court recognized that the government has the autonomy to increase or decrease rates”, said rapporteur Zarattini.
Splice blocking
The government leader in Congress, Randolfe Rodrigues (PT-AP), . According to him, the loss of revenue will force the government to promote contingencies to maintain the goals defined in the fiscal framework and the Fiscal Responsibility Law (LRF).
Continues after advertising
“If it is not approved by the MP, there will be a contingency of R$7 billion to R$10 billion just for amendments. We will look for alternatives to maintain revenue, but this is an inevitable consequence”, stated Randolfe.
“If we have a drop in revenue, obviously, we have to increase the contingency. There is no room for failing to meet targets”, he added.
Centrão Resistances
The MP faced strong resistance from agribusiness benches and business sectors, who criticized the increase in the tax burden on investments and financial operations.
Continues after advertising
PT leader in the Chamber, Lindbergh Farias (RJ), countered the pressure and sent a direct message to businesspeople opposed to the proposal.
“If this group from the lobbies is thinking they are going to get away with it, on the contrary: the situation could get worse. This group from agriculture, who think they are getting away with it, could be devising a unilateral measure from the government that would harm them even more”, he said.
Political defeat
The MP’s withdrawal from the agenda deepened the isolation of the Lula government in Congress and opened up the split in the allied base, which had already been manifested in previous votes, such as the amnesty PEC.
Continues after advertising
With the measure out of processing, the Ministry of Finance will need to recalibrate the fiscal plan and seek new sources of revenue to offset the billion-dollar impact. The challenge is to balance the 2026 budget amid the slowdown in revenue and increasing pressure for more spending.
What MP 1,303 predicted
Provisional Measure 1,303, published in June 2025, was part of the government’s fiscal package and provided for:
• Unification of the Income Tax rate at 18% on all financial investments, including Interest on Equity (JCP);
• Increase in CSLL from 9% to 15% in fintechs and to 20% in the largest financial institutions;
• Taxation of cryptoassets at a rate of 17.5%;
• Removal of the exemption for some incentivized securities, such as debentures and letters of credit — a point reversed by Congress;
• Creation of the betting regularization regime (Zero Bets Litigation), which provided for a 15% IR charge and a 100% fine on undeclared winnings;
• Expected to raise R$17 billion in 2026, after concessions made to agribusiness and financial market sectors.
