The Minister of Finance, Fernando Haddad, defended the recovery of “uncontroversial” sections of the Provisional Measure 1,303/2025which proposed alternatives to raising the Tax on Financial Operations (IOF). He met this Wednesday morning (15) with the president of the Senate, Davi Alcolumbre, in search of a way out of the hole in the 2026 Budget, caused by the rejection of the MP by Congress.
The loss of validity of the MP, removed from the agenda of the Chamber of Deputies after pressure from parties in the center, opened a hole estimated at R$31.56 billion in the 2026 Budget. Of this total, R$20.87 billion are in revenue and R$10.69 billion in cost savings.
The rejection of the text forced the government to postpone the vote on the Budget Guidelines Law (LDO) project for next year.
During the meeting, Haddad presented scenarios and defended the strategy of “recovering” the less controversial sections of the MP, which, according to him, represent more than 70% of the original proposal and had consensus between the government and Congress.
“A large part of MP 1,303 was uncontroversial and had everyone’s agreement. The entire registration control and compensation discipline part was pacified”, said the minister after the meeting.
Consensus
Among the “consensual” proposals cited by Haddad are the limitation of undue tax compensations, with potential revenue of R$10 billion, and the control of defense insurance registration, which would generate savings of R$1.7 billion.
The minister has the support of Alcolumbre and the leader of the Government in Congress, Randolfe Rodrigues (no party-AP), who also participated in the meeting.
MP 1,303 was part of the government’s strategy to balance the 2026 accounts and envisaged a combination of increased revenue and spending cuts. In addition to the two priority measures, the text included proposals such as increasing the Social Contribution on Net Profit (CSLL) rate for fintechs, higher taxation on online betting and the end of tax exemption for incentivized private securities.
Alternatives
With the loss of validity of the MP, the government is evaluating different ways of restoring revenue. Among them are tax adjustments on banks and large fortunes, changes to the budget proposal sent in August and a cut of more than R$7 billion in parliamentary amendments, a hypothesis considered politically sensitive in an election year.
Haddad said that Alcolumbre “understood what is at stake” and suggested steps forward, but highlighted that the definitive solution will depend on a broader agreement with the entire parliamentary base.
LDO postponed
The impasse led the government to request the postponement of the vote on the 2026 LDO project in the Mixed Budget Committee. The analysis, scheduled for Tuesday (14), was rescheduled for the 21st. According to Haddad, the delay is necessary to ensure coherence between tax and budget laws.
“It’s better to spend an extra week and finalize a text that makes sense for everyone than to have inconsistency between the LDO, the Budget and the laws that provide for tax and primary spending”, he assesses.
Negotiations should continue in the coming days, with the aim of restoring revenues and preserving fiscal balance in the face of the fall of the MP and the political impasse in the Chamber of Deputies.
