After much discussion and back-and-forth, the provisional measure presented as an alternative to the IOF increase advanced this Tuesday (7). This was due to the approval of the text by the joint committee of Congress. The result was 13 votes in favor and 12 against. A key highlight was the removal of the 18% tax increase
on sportsbooks from the text.
Provisional Measure 1,303/2025, which addresses the taxation of financial investments and virtual assets, received a series of changes from the rapporteur, Congressman Carlos Zarattini (Workers’ Party, São Paulo). According to the government, the concessions included in the new report will reduce revenue in 2026 by R$3 billion.
Very important for the government’s 2026 fiscal balance, the MP is valid until this Wednesday (8). In other words, if there is no vote by both houses of Congress by that date, the MP loses its validity.
The committee’s approval came after intense negotiations throughout the day, including a meeting with Finance Minister Fernando Haddad in the Senate Presidency. Therefore, since the text was changed, the MP now remains as a Conversion Bill for review in the plenary sessions of the Chamber of Deputies and the Senate.
Sportsbooks
One of the obstacles to the approval of the text since the proposal was presented, the removal of the increase in taxation on betting houses from the text represents one of the main changes in the new MP report.
It is worth noting that the measure seeks to compensate for the loss of revenue following the revocation of the increase in the Tax on Financial Transactions (IOF), rejected by Congress at the beginning of the year.
The initial text of the MP provided for the taxation of gross revenue from regularized sportsbooks at a rate of 12% to 18%.
The rapporteur, Zarattini, proposed the repatriation program to regularize funds sent abroad, with a 15% tax rate and an additional 15% fine. Furthermore, the estimated revenue is approximately R$5 billion—the equivalent of three years’ worth of revenue if the tax rate were changed.
The Special Regime for Regularization of Exchange and Tax Assets (RERCT Litígio Zero Bets) is a program to tax sportsbooks that operated in Brazil before the sector’s regulatory phase.
Tax impact
Treasury Minister Fernando Haddad currently estimates that revenue from the provisional measure should exceed R$17 billion in 2026. However, he says the estimates will need to be revised following changes to the text. This figure is lower than the R$20.8 billion originally forecast for 2026. The initial projection was to raise R$35 billion by 2027 and R$50 billion by 2028.
Haddad said there were mutual concessions between the branches of government to make the proposal viable. Regarding the elimination of taxation on LCIs and LCAs, the minister stated that the topic generated debate and that, given the high interest rates, he decided to address the matter at a later date.
According to Haddad: “As with any agreement, there were mutual concessions from the Chamber, the Senate and the government to arrive at a text that could be appreciated.”
Expiry date
The MP was issued by the Executive as an alternative to the decree that increased the IOF, considered unconstitutional by Congress.
With a final validity period until this Wednesday (8), the proposal still needs to be approved by the Chamber of Deputies and the Senate to remain valid.
