The government’s main bet to balance the 2026 Budget, the cut in tax incentives was approved this week by Congress. With the potential to increase revenue by around R$22.4 billion next year, the proposal also increases taxes on online betting companies (bets), fintechs and large companies that remunerate partners through interest on equity (JCP).
Approved in the early hours of last Wednesday (17) by the Chamber of Deputies and on the evening of the same day, the text goes to the Senate for approval by President Luiz Inácio Lula da Silva. At the beginning of the week, the Minister of Finance, Fernando Haddad, had said that the project was important to avoid a cut of around R$20 billion in the 2026 Budget.
Below, see the main points of the project and how it affects companies, sectors and public accounts.
What does the project do?
The project reduces part of federal tax incentives and benefits by 10% and, at the same time, increases taxes on:
- Online sports betting houses (bets);
- Fintechs and other financial institutions;
- Interest on equity (JCP).
In addition, it creates stricter rules for control, transparency and limits for granting tax benefits in the country.
Which taxes will have reduced benefits?
The 10% reduction affects incentives linked to the following federal taxes:
- Social Integration Program (PIS) and Public Servant Asset Formation Program (Pasep) and PIS/Pasep-Importation;
- Contribution to the Financing of Social Security (Cofins) and Cofins-Importation;
- Tax on Industrialized Products (IPI), Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL);
- Import Tax;
- Employer social security contribution.
The decrease affects the so-called tax expenses listed in the 2026 Budget and special regimes, respecting the exceptions provided for in the text.
Which regimes and sectors may be affected?
Among the benefits that may be reduced are:
- Special Chemical Industry Regime (Reiq);
- Presumed IPI credits for exporting companies;
- Presumed PIS/Cofins credits for sectors such as pharmaceuticals, agriculture, food, road passenger transport and coffee and citrus exports;
- Zero PIS/Cofins rate for importers of fertilizers, pesticides and petrochemical naphtha.
In the case of presumed profit, the text allows the tax calculation base to be increased by 10%, but only on the portion of annual gross revenue that exceeds R$5 million.
What are the exceptions?
The reduction does not affect:
- Constitutional immunities (religious temples, political parties, books);
- Manaus Free Trade Zone and free trade areas;
- Products from the national basic basket;
- Non-profit philanthropic entities;
- Simples Nacional companies;
- Programs such as Minha Casa, Minha Vida and Prouni;
- Aldir Blanc Law;
- Payroll relief;
- Incentives for the information technology, communication and semiconductor sectors.
Benefits granted for a specified period to companies that have already met the compensation required by law are also preserved.
What changes for betting?
Taxation on betting houses will be increased gradually. Today, it is 12%, but will increase to:
- 13% in 2026;
- 14% in 2027;
- 15% in 2028.
Half of the additional revenue will be allocated to social security and the other half to health actions.
The text also tightens supervision and provides for joint liability for anyone who advertises or maintains unauthorized betting operations.
And for fintechs?
The project increases the CSLL (Social Contribution on Net Profit):
- Fintechs and capitalization companies increase from 15% to 17.5% by 2027 and to 20% from 2028;
- Other financial institutions, such as exchanges and settlement entities, will have rates increased from 9% to 12% by 2027 and to 15% from 2028.
What changes at JCP?
Income tax withheld at source on interest on equity (JCP) increases from 15% to 17.5%. JCP is used by large companies to remunerate partners and shareholders.
Are there new limits for tax benefits?
Yes. The text establishes that, if tax incentives exceed 2% of the Gross Domestic Product (GDP), the granting, expansion or extension of new benefits is prohibited, unless there are tax compensation measures.
According to the government, tax benefits in Brazil can reach R$800 billion per year.
Does the project address tax crimes?
Yes. It increases penalties for tax crimes when they involve goods protected by constitutional immunities, such as books and religious temples.
What are the revalidated “remaining payments”?
The project allows for the revalidation of committed but unpaid expenses that had been canceled from 2023 onwards. These amounts can be paid off by the end of 2026, including appeals from parliamentary amendments. The estimated impact on government coffers is around R$3 billion.
When do the changes come into effect?
Most of the measures come into effect on January 1, 2026.
However, changes that involve an increase in taxes or a reduction in benefits must respect the nineteen: a minimum period of 90 days after the presidential sanction to enter into force.
*with information from the Chamber and Senate Agencies
