Brazil’s Finance Minister Fernando Haddad has reportedly unveiled plans to raise levies on interest on equity and the social contribution on profits (CSLL).
The tax hike is aimed to offset the costs associated with the partial extension of the optional regime for social contributions on gross income (CPRB). This extension was recently approved by the Senate under Bill No. 1847 of 2024. The bill is awaiting approval from the Chamber of Deputies.
The legislation deals with the transitional regime for the end of the payroll tax exemption for 17 sectors of the economy, which extends the exemption until the end of 2027. According to the bill, the gradual reinstatement of the payroll tax will last for three years (2025 to 2027). It maintains the full exemption in 2024 and establishes the gradual resumption of taxation starting in 2025, with a rate of 5% on the payroll. In 2026, 10% will be charged and, in 2027, 20%, when the exemption would end.
