Brazil’s government proposed R$12.6 billion in federal tax-debt relief for about 3.6 million micro-entrepreneurs, though Congress still decides whether the central measure becomes law. President Luiz Inácio Lula da Silva announced the package at the Planalto presidential palace in Brasília, with 11 days remaining before the presidential runoff.
Relief, on Congress’s Terms
The main proposal would cancel federal tax debts owed by all MEIs, or microempreendedor individual businesses. MEI is a simplified tax status for one-person businesses that pay a small fixed monthly tax slip. According to Exame, a Brazilian business magazine, the Ministry of Entrepreneurship says about 3.6 million MEIs owe a combined R$12.6 billion, largely from unpaid monthly tax slips.
The bill needs an absolute majority in Congress. Lawmakers haven’t voted, and the government has offered no decision date beyond asking them to act urgently. Congress must approve both the debt forgiveness and a separate increase to the MEI revenue ceiling. People carrying the tax debts don’t control the timetable.
Finance Minister Dario Durigan said National Treasury attorneys collect the debt, often through court action. “The conclusion of the technical staff is that this is debt that is largely unrecoverable,” he said, according to Exame. The article said the proposed cancellation could therefore cost less than its headline value.
A second measure, the proposed one-off “Pix MEI” grant, would provide up to R$5,000 per business for equipment and improvements. “It is not credit,” Entrepreneurship Minister Paulo Henrique Rodrigues Pereira said at the ceremony. Planning Minister Bruno Moretti put the program’s cost at R$5 billion over four years, with a projected annual cost of about R$1.25 billion from 2027.
A Campaign Promise With Conditions
Electoral law bars the grant program from starting in 2026. It could begin in 2027 if Lula wins. Officials haven’t published eligibility and verification rules, leaving the proposed aid’s terms unsettled.
The government also plans to use its Desenrola 3.0 program to buy MEI debts from banks, requiring discounts of at least 90%. Durigan said creditors offering the largest discounts would have their loans bought first. Reports gave different figures for those bank debts, so the government provided no total.
Lula asked Congress to fast-track a bill that would raise the annual MEI revenue ceiling from R$81,000 to R$110,000 in 2027 and R$140,000 in 2028. Exame reported that the bill’s justification estimates the higher ceiling would cost about R$8 billion over three years. A fifth measure, a decree, confirms that MEIs need not issue invoices on sales to private individuals.
Votes, Bets and the Small Print
Lula, 80, leads the left-wing Workers’ Party (PT) and is seeking a fourth term. His rival, Flávio Bolsonaro, is a conservative Liberal Party (PL) senator for Rio de Janeiro and the eldest son of Jair Bolsonaro. Lula finished behind Flávio Bolsonaro in the first round and needs votes among small entrepreneurs, a group where he polls weakly, InfoMoney reported.
Lula told entrepreneurs, “We are going to help you get out of the squeeze,” according to the state news agency Agência Brasil. He said entrepreneurs had raised the demands behind the measures and that the government would turn them into bills and decrees. The package must pass through government offices and Congress; the article reports no direct-action or mutual-aid response.
Election-year spending promises can shape how investors judge Brazil’s public finances, the real and interest rates that drive Brazilian bonds and stocks, the article said. On Polymarket, bettors gave Flávio Bolsonaro an 87% chance and Lula a 13.5% chance of winning at 3:14 p.m. ET on 13 October. The report stressed these were bets, not polls, and said prices could move quickly. The market had drawn about US$181 million in total bets. Relief is on offer; Congress still decides its shape and reach.