HomeBRAZILHISTORIC DEFEAT FOR LULA IN CONGRESS

HISTORIC DEFEAT FOR LULA IN CONGRESS

A recent wave of political and fiscal turbulence in Brazil has intensified following Congress’s repeal of a presidential decree that raised the IOF tax, marking a rare and historic defeat for the Lula administration. The revocation is expected to cause a significant revenue shortfall, potentially reaching R$15 billion in 2025, and has exacerbated tensions between the Executive and Legislature. As Congress continues to push measures that expand spending and block cost-cutting initiatives, the federal government is pivoting its messaging toward taxing the wealthy and challenging elite privileges. Meanwhile, Congress has also approved an increase in the number of federal deputies, raising concerns about political optics despite claims of no added expenses.

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