The proposal was approved by 45 votes to 31. Senators still need to analyze the proposal's highlights, that is, possible changes to the text. Voting is expected next Tuesday (17).
With a 10% linear cut in tax benefits and changes in the calculation of spending floors, the text faced resistance from opposition senators.
💵 The Minister of Planning and Budget, Bruno Moretti, stated that the set of measures could reduce between R$50 billion and R$60 billion in spending in the 2027 budget. The government is in a hurry to approve the text so that the rules can already be in force for next year.
The government's objective is to contain the growth of public expenditure and increase revenue to try to stabilize public debt, preserving social policies.
The text approved by the Federal Senate, by rapporteur Eduardo Braga (MDB-AM), did not include significant changes in relation to the one initially presented by senator Jaques Wagner (PT-BA).
See the main changes proposed by the government:
Reduction of tax benefits
The project foresees changes in the rules for granting tax incentives and benefits. The main one is the implementation of an old government defense: a new linear cut of 10% in benefits that the government offers to the most different sectors of the economy.
The benefit cut has been a defense of the Ministry of Finance since the administration of Fernando Haddad (PT). At the end of 2025, there was already a 10% cut.
Another measure authorizes the Executive to limit the use of tax credits to offset taxes owed to the Federal Revenue. Currently, companies that have tax credits can stop paying certain taxes.
Under the project, the government will be able to establish restrictions on these compensations, with different percentages depending on the value or type of credit used. The measure may be adopted at times when the government enters into spending restraint.
In practice, the restriction can increase cash collection in the short term, because part of the taxes that would be paid with credits will have to be effectively paid, with cash, by companies.
The excerpt led to harsh criticism from the production sector. In a note, 57 entities criticized the fact that the text did not determine a deadline for compensation to return after a possible government decision.
"The text does not say whether the retained credit will be returned, within what period or with what correction, and the rule would be valid from the publication of the law", says the note.
Changes to the tax rule
One of the main points of the project is the change in the rules for the growth of public expenditure. Currently, the fiscal framework allows federal spending to grow, above inflation, between 0.6% and 2.5% per year, depending on the behavior of revenues.
With the project, in years when the government needs to cut spending to meet the target, the ceiling will be 2%.
The text also expands the possibility of cutting expenses, allowing the Executive to block resources even when the projected result of public accounts is within the lower tolerance margin of the fiscal target.
The cuts, however, need to respect some rules: they need to be spent by the Executive Branch itself, in a block that can be reviewed, and sectors such as science and technology are protected.
Changes in the calculation of the health floor
The project changes the calculation basis for certain expenses linked to collection, such as the health floor. The text provides that, until 2030, revenue from the tax on oil exports will not be considered in the calculation of certain expenditure programming obligations, as is the case today.
According to Minister Bruno Moretti, the intention is to remove extraordinary revenues related to oil from the basis for calculating constitutional expenses. The exclusion of these revenues reduces the amount that must be allocated to the area.
Moretti argued that the change follows the logic that revenue from oil only grew extraordinary due to the increase in fuel prices caused by the conflict in the Middle East and is not a continuous revenue, which inflates spending on the healthcare floor.
The idea is not to count on extraordinary gains - which may not happen in the future - for expenses that are ongoing and must always be made.
The removal of these revenues from the floor calculation is already in force in 2026, but on a temporary basis. With the project, the measure could be extended until 2030.
Public funds
One measure to give the government flexibility to manage the budget is to change the rules on resources with specific destinations, such as public funds. With the project, up to 40% of the money that was not used from the funds in the previous year could be allocated to public expenses provided for in the Constitution.
To this end, the project amends the Fiscal Responsibility Law – which prohibits the use of the balances of these funds. However, the current project maintains the prohibition on reallocating resources from essential areas, such as health, education, public security, social security, social development and transfers to states and municipalities.
Reduction of super salaries
The project also provides for measures related to the so-called super salaries for civil servants. The text establishes a deadline of up to 120 days for Congress to approve a proposal that regulates payments to civil servants above the ceiling – currently at R$46,300.
The project does not directly eliminate the so-called penduricalhos, additional payments that can make civil servants' remuneration exceed the ceiling. This will have to be defined in the National Congress.
Expansion of the list of expenses that can be contingency
Currently, only discretionary expenses, those that the government can decide whether and how much to spend, can be temporarily frozen (contingent, in economic jargon) to meet fiscal targets.
With the proposal, mandatory expenses that are not in the Federal Constitution will also be subject to containment. According to economist Felipe Salto, this set of expenses represented R$388 billion in 2026.
In this case and in the case of the additional trigger for cost containment, the changes are permanent and will apply every year.
Diesel subsidy outside target
Despite the expense containment measures, the project also foresees a relaxation of fiscal rules to allow spending on diesel subsidies.
The proposal authorizes the government to disregard up to R$10.5 billion in extraordinary expenses to stabilize fuel prices within the 2026 fiscal target. The resources are related to the granting of economic subsidies to diesel producers and importers.
In justifying the project, Jaques Wagner states that the measure is necessary given the effects of the war in the Middle East on fuel prices.
The exclusion of expenses from the fiscal target does not mean that the expenses will no longer exist or affect public accounts. The measure only allows them to be disregarded in the assessment of compliance with the fiscal target.
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