How is the tax after Congress overturns the government decree?

The Senate and the House of Representatives approved on Wednesday night (25) the project of Legislative Decree that revokes the increase in the financial operations tax (IOF) established by the federal government in May. With the cancellation, previous tax rates are valid again for operations such as exchange rates, international cards and corporate credit.

With the decision of Congress, the increase in IOF that had been implemented by presidential decree is no longer valid. The measure was approved in a symbolic vote in the Senate, after having passed the House, and does not need presidential sanction to take effect.

The rates that have been in force since May 22, and which had been “recalibrated” by the government on a new decree on June 11, are now fully revoked.

See how the IOF is after the decision:

• International credit and debit cards: back to 3.38%overthrowing the increase to 3.5%.
• Remittances for accounts abroad: returns to 1.1% In the case of shipments for investment; Previously it had been raised to 3.5%.
• Purchase of foreign currency in kind: back to 1.1%.
• Credit for Business (PJ): Fixed rate returns to 0.38% + 0.0041% per day (ceiling of 1.88% per year).
• Nacional Simples (up to R $ 30 thousand): returns to 0.88% per year.
• DREATED RISK OPERATIONS: They are exempt again.
• Private Pension (VGBL and the like): Being exempt againremoving IOF’s proposal on contributions that exceeded R $ 300 thousand in 2025 or R $ 600 thousand from 2026.

Effect on public accounts

The government had the increase in IOF to reinforce the collection by 2025, with an expectation of entry of R $ 10 billion in the public coffers. The overthrow represents another setback in the Plateau attempt to support the tax framework and generate additional revenues without cutting spending. The government argues that cuts would directly affect social programs, such as Bolsa Familia.

The vote, which happened rapidly and surprised even government allies, reflected the growing discomfort of Congress with the executive. Parliamentarians have shown dissatisfaction with the pace of release of amendmentsand the relationship worsened after speech by Haddad and the overthrow of vetoes that affect the light bill, movements that deputies see as a negative government campaign against Congress.

What can still change

The revocation of the IOF decree does not automatically affect Provisional Measure 1303, which alters the taxation on investments, including the end of the exemption to LCI, LCA and encouraged debentures, which continues to be processed in Congress. The text can still be modified or rejected, and the government bets on negotiation with the legislature to try to preserve part of the originally foreseen collection. The climate for agreements, however, got worse.