IOF Increase Rejected by Chamber of Deputies

On June 25, the Chamber of Deputies approved the Legislative Decree Bill (PDL 314/2025), suspending the effects of three presidential decrees that provided for an increase in the Tax on Financial Operations (IOF). With a significant score of 383 votes in favor and 98 against, the decision is a strong reaction by the Legislative Branch against the Executive's attempt to increase tax collection by decree, without prior discussion with Congress.

The measure was also endorsed by the Senate on the same day, officially ending the validity of Decrees 12,466/2025, 12,467/2025 and 12,499/2025, which altered IOF rates and levies on credit, foreign exchange, insurance and securities transactions.

It is important to note that the presidential decrees were aimed at increasing federal revenue in the face of fiscal pressures and an imbalance in government accounts. The measures sought to raise around R$20 billion by 2025, and up to R$61 billion by 2026, according to estimates by the Ministry of Finance.

The changes provided for an increase in tax rates on credit operations, including for individuals, an increase in the IOF on foreign exchange transactions and international remittances and the establishment of new calculation bases for certain financial operations. The federal government's justification was that these adjustments were necessary to ensure fiscal balance, especially in the face of social investment commitments and primary result targets.

From the point of view of tax law, the overturning of the IOF increase represents a reinforcement of legal certainty. It is clear that attempts to modify taxes with a significant impact by decree, without the participation of the Legislature, generate regulatory instability and uncertainty for individuals and companies, as well as political wear and tear.

Predictability is an essential pillar for good financial and tax management for companies, especially those with credit operations or recurring international transactions, so that sudden changes in taxes such as the IOF affect the cost of capital, the pricing of products and services and short- and medium-term budget planning.

It is also important to consider that the overturning of the increase reinforces the importance of strict legality in tax matters, where the institution and increase of taxes must respect due legislative process, in accordance with constitutional principles.

Despite the setback imposed on the Executive, the fiscal pressure on the public budget remains. It is possible that other proposals to increase taxes or create new contributions (such as the resumption of discussions on a tax on large fortunes or changes to income tax) will gain momentum in the coming months.

This is why continuous monitoring of tax reforms and strategic planning are essential for asset protection and business efficiency.

Our firm remains available to advise companies and taxpayers on legislative and regulatory changes in the Brazilian tax scenario.