The IOF design should prevail, with a clear and distinctly regulatory nature, not a revenue collection one.

In view of the Lula government 's appeal to overturn the National Congress 's failure to approve the increase in the Tax on Financial Transactions (IOF) , seeking to minimize its fragile fiscal framework, it seems important to me to highlight the illegality of the presidential decrees (Nos. 12,466/25, 12,467/25 and 12,499/25) due to the imposition having a clear profile of a revenue tax.

The seven federal taxes and the current three state and three municipal taxes were divided into two broad categories: "revenue taxes" and "regulatory taxes." The former are intended to maintain the public sector at its administrative and investment levels in the public interest, and the latter are intended to control and prevent imbalances in certain sectors of the economy.

Thus, Income Tax (IR), Tax on Industrialized Products (IPI), Large Fortunes, ICMS, non-onerous transfer of vehicles, urban real estate and land property, and onerous real estate services and transfer were included in the category of revenue taxes; import and export taxes to control foreign trade, on financial transactions to regulate the credit, exchange and insurance system, and rural land property taxes to stimulate agriculture and allow agrarian reform were included in the list of regulatory taxes.

The legal nature of the IOF, therefore, is regulatory, not revenue-generating. However, presidential decrees, contrary to the Constitution, transformed it into a revenue-generating tax to offset the loss of revenue from the proposed greater income tax exemption for lower incomes. This was the Executive's real motivation.

It turns out that this mutation made the decrees illegal because they violated the "constitutional explanation in the National Tax Code (CTN)", as would be the case, for example, by levying income tax on a "non-acquisition" of economic or legal availability of income and proceeds of any nature (art. 43 of the CTN).

Clearly, the statement that the IOF is for revenue collection and not regulatory purposes does not correspond to what has been discussed since the debates for the CTN, in the 1960s, in EC No. 18/65 in the 1967 Constitution, in EC No. 1/69 and in articles 145 to 156 of the Federal Constitution.

For this reason, it seems to me that it would be up to the Federal Supreme Court (STF) not to hear the request, since the jurisdiction, strictly speaking, to discuss the constitutional explanation of the National Tax Code, accepted by the 1988 Constitution, would be of the Superior Court of Justice, and, in this, the design of the IOF should prevail, whose nature is clearly and distinctly regulatory and not revenue-generating.