The Chamber of Representatives rejected Provisional Measure (MP) 1303/2025, which proposed an increase in taxes on online betting and financial investments. Initially, the measure would have raised the betting tax rate from 12% to 18%. Furthermore, it intended to tax investment income to compensate for the repeal of the decree that expanded the Tax on Financial Transactions (IOF).
The Representatives had until this Wednesday (8) to approve the text. Therefore, with 251 votes in favor and 193 against, they decided to remove the MP from the agenda, which made the text lose validity.
Earlier, Treasury Minister Fernando Haddad requested that the National Congress maintain the agreement with the federal government. He stated that there had been ongoing dialogue and several concessions. However, Centrão parties remained resistant.
The bill’s rapporteur, Carlos Zarattini (Workers’ Party-SP), emphasized the effort to approve the text: “We have worked for 120 days to ensure the MP’s approval. We made progress on several points, met many demands, and created a text that would have all the conditions to be approved in this House and signed by the President of the Republic—a consensus text.”
Among the changes to the text, Zarattini had removed the tax increase for the betting sector before approval by the Joint Committee last Tuesday (7). To compensate for this loss, the rapporteur included the Special Regime for Regularization of Exchange and Tax Assets (RERCT Litígio Zero Bets).
In practice, the mechanism would create a retroactive charge, requiring companies to regularize undeclared resources from the period prior to the regulation.
Proposal would increase taxation on banks and billionaires
The original version of the MP provided for new taxes for billionaires, banks, and betting companies. In addition to gross betting revenue, the measure included taxes on Agricultural Credit Letters (LCA) and Real Estate Credit Letters (LCI), as well as Development Credit Letters (LCD) and interest on equity.
Initially, the government estimated raising R$10.5 billion in 2025 and R$21 billion in 2026. After negotiations, the projected amount was reduced to R$17 billion. These resources would strengthen the budget and help achieve the R$34.3 billion surplus target for 2026.
Workers’ Party (PT) leader Lindbergh Farias criticized the plenary’s retreat: “We consider what is happening here today an act of sabotage against Brazil. The rapporteur was patient enough to discuss a settlement on the merits, but what became clear to us is that the intention here was to impose a political defeat on Brazil, not on President Lula.”
The opposition classified the measure as a “lying MP”
Congressman Mendonça Filho (União-PE) criticized the proposal and stated that it was misleading: “Its origin was to replace the IOF increase, which was overturned in this House in the National Congress, and which the government appealed and by a single decision of a minister of the Supreme Federal Court was reinstated.”
With the expiration of the provisional measure, the federal government will have to review the 2025 budget. Thus, new spending freezes are likely, including in parliamentary amendments. Finally, the estimated revenue loss is R$35 billion in 2026.
