Production sector celebrates the overthrow of IOF: “Victory for tax rationality”

The decision by the National Congress to suspend the presidential decrees that increased the rate of the Tax on Financial Transactions (IOF) from 2025 generated strong repercussions in the productive sector and among experts in public accounts. The measure, approved on Wednesday night (25), was considered an important brake on the escalation of the tax burden and a political gesture in favor of economic predictability.

The decision was made official this Thursday (26) and the rules prior to the increase will come into effect again as soon as the measure is published in the Official Gazette of the Union . In other words, in practice, the IOF rates will return to their previous levels, affecting operations such as foreign exchange, credit, insurance and investments. The government is still studying measures to compensate for the loss in revenue estimated at R$10 billion.

For the president of the Center for Public Leadership (CLP), Tadeu Barros, although the decision by the Legislature was expected, it reveals the limitations of the federal government's economic package. "The package announced by the Executive Branch eases the cash flow in the short term, but does not address the heart of the problem: the explosive growth of mandatory expenses. Without a broader review of incentives and payroll, we run the risk of exchanging immediate relief for a new imbalance later on," he warned.

The Federation of Industries of the State of Minas Gerais (FIEMG) also celebrated the overturning of the increase as a necessary step forward for the business environment in the country. The organization's president, Flávio Roscoe, stated that the decrees went against good tax practices and further penalized credit at a time of economic fragility.

“This is a necessary technical correction. The increase in the IOF rate was contrary to the best tax techniques, in addition to imposing an additional burden on productive credit at a time when the Brazilian economy requires stimulus to grow in a sustained manner,” said Roscoe.

According to him, the IOF, due to its regulatory and transitory nature, should not be used as a permanent source of revenue, nor as an escape valve to cover increases in public spending. “The increase generated distortions and raised the cost of credit for companies and individuals,” he criticized.

In addition to the direct impact on the financial sector, FIEMG pointed out risks of legal uncertainty and loss of confidence in the country as a consequence of maintaining the decrees. “The industry already faces an extremely onerous and complex tax system. Any increase in the burden, without technical debate and outside the public budget, undermines confidence and scares away investments,” it added.

By overturning the decrees, Congress imposes yet another defeat on the federal government in fiscal matters and reinforces the legislative branch's leading role in decisions that directly affect the country's economy.