The Brazilian government is proposing to forgive federal tax debts of about 3.6 million individual microentrepreneurs. The total amount of debts is 12.6 billion Brazilian reais, or approximately 2.5 billion dollars. The measure is part of a package for small businesses announced by President Luiz Inácio Lula da Silva on October 13 - 12 days before the second round of the presidential election.
The forgiveness will not take effect automatically. The government must submit a draft supplementary law to the National Congress to be approved by deputies and senators. According to a technical assessment by the Attorney General's Office of the State Treasury, the debts are uncollectible. If the proposal is accepted, the related legal proceedings will also be terminated, and the affected entrepreneurs will be able to obtain a certificate of lack of debts.
Bank discounts are also provided
The package, called “Prospera MEI“, includes a total of five measures. Through the “Desenrola 3.0“ program, the government plans to buy out bank debts of individual microentrepreneurs for about 6 billion reais. To participate, financial institutions will have to offer a discount of at least 90% on debts. Priority will be given to portfolios with the greatest reduction.
The “Pix MEI“ initiative is also planned, under which microentrepreneurs can receive up to 5,000 reais for investments in their business. The funds will be free and non-refundable. The government estimates that between 2027 and 2030, up to 5 billion reais could be allocated to this program, with priority given to women entrepreneurs. This measure would also require legislative approval.
Changes in the income threshold
Another element of the package is the insistence that Congress approve a higher annual threshold for individual microentrepreneurs. The proposal calls for it to increase from 81,000 to 110,000 reais in 2027 and to 140,000 reais in 2028. The number of authorized employees would also be increased from one to two.
In a separate decree, Lula abolished the obligation to issue an invoice when selling goods and providing services to individuals. The rule also covers the so-called nanoentrepreneurs, who will be able to operate without registering a legal entity and without issuing invoices for transactions with individuals.
“We will help you get out of this difficult situation. We will give you air so you don't suffocate“, Lula said when presenting the measures, Agenzia Brasil reported.
The package was announced between the two rounds of the elections, in which Lula is seeking a new mandate against Senator Flavio Bolsonaro. In the first round, Bolsonaro received 47% of the valid votes, and Lula - 45%. The opposition candidate's campaign described the initiative as a pre-election move, while the government presented it as support for small entrepreneurs.
The next step is expected to be the official submission of the legislative proposals to Congress. Until they are adopted, the federal debt forgiveness and grant funding remain proposals, not actual rights.
Sources: cnnbrasil.com.br, agenciabrasil.ebc.com.br