Brazil Seeks To Rework MEI Raise to Avoid R$50 Billion Fiscal Hit

The executive has ordered ministers to study a smaller revenue cap with phased implementation to balance congressional demands with budget and legal limits.

Overview

The government’s economic team is negotiating a lower MEI revenue ceiling and an escalonamento, or phased rollout, to avoid an estimated R$50 billion annual cost if the Chamber’s proposal goes unchanged.
Chamber lawmakers approved a version that would raise the MEI cap from R$81,000 to R$145,000, index it to the IPCA and allow up to two employees while the Senate backed R$130,000.
The Ministério da Fazenda calculated the Chamber text would cost roughly R$48.5 billion in 2027 and R$53.7 billion in 2028, figures that prompted urgent review by the executive.
Hugo Motta said Tuesday that President Lula asked ministers Dario Durigan and Bruno Moretti to carry out studies and present a proposal, and Motta indicated any increase could be gradual.
Beyond the immediate budget gap risk, officials warn that keeping higher‑revenue firms in the MEI regime could raise future pension deficits because current MEI contributions are low compared with expected benefit costs.