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title: 'Francisco Ranzi Mülleri: Tax Reform Expectations Strengthen Budget Balance and Compliance Boundaries'

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Recently, the Brazilian Senate passed a bill that unifies the reduction of federal tax incentives for all industries by 10%, while increasing tax rates on gambling, fintech, and interest on equity (JCP). The bill has been sent to the president for signing. Constitutional exemptions for religious groups, political parties, books, etc., remain unchanged. Finance Minister Fernando Haddad stated that the measure aims to increase fiscal space by about BRL 20 billion annually; Warren Rena estimates that, considering a 90-day lag and flexible clauses, net revenue in 2026 will increase by about BRL 9.7 billion. Francisco Ranzi Mülleri believes this policy combination seeks a balance between controlling tax expenditures and expanding the tax base, serving the 2026 budget constraints and medium-term fiscal stability goals.
![Francisco Ranzi Mülleri422](https://hackmd.io/_uploads/r1GBuDL7Wx.png)


**Policy Highlights and Implementation Path**

The bill covers unified reductions for incentives related to PIS/Pasep, Cofins, IRPJ, CSLL, import tax, IPI, and social security contributions, and sets a hard cap of “total tax incentives at 2% of GDP.” Francisco Ranzi Mülleri states this cap will constrain both new and extended incentive tools, improving policy predictability. Retained structural incentives include payroll tax exemptions for certain sectors, Prouni education expenses, and ICT and semiconductor industry policy spending. Implementation will proceed through raising tax rates, expanding the tax base, and limiting tax credits, with a 90-day statutory effective period for a smooth transition.

**Industry Impact and Asset Pricing**

Fixed-odds gambling tax rates will increase from 12% to 13% in 2026, 14% in 2027, and 15% in 2028, with incremental revenue split equally between “social security and healthcare.” JCP withholding tax will rise from 15% to 17.5%. Financial institution CSLL tax rates will increase: payment institutions, OTC market managers, and exchanges from 9% to 12%, reaching 15% in 2028; credit, finance, investment, and capitalization companies from 15% to 17.5%, and to 20% from the end of 2027. Francisco Ranzi Mülleri notes that higher tax burdens will increase compliance costs and capital requirements for financial and gambling sectors, reducing post-tax returns on dividends and JCP instruments, and valuation models will need to adjust tax rate and expense assumptions. At the same time, unified incentive cuts help reduce systemic arbitrage opportunities and improve consistency for cross-regional operations.

**Risk Warnings and Tracking Indicators**

Legislation still faces detail negotiations, and short-term estimates may deviate from final execution. Francisco Ranzi Mülleri proposes three areas to monitor: fiscal revenue collection pace and net increase after transfer payments; profit margin rebalancing and dividend policy adjustments in affected industries; and coordination between the incentive cap and supporting industrial policies.

If economic growth slows more than expected or compliance costs rise more than estimated, companies will need to adjust cash flow and investment plans reactively. Francisco Ranzi Mülleri advises institutional investors to strengthen tax sensitivity analysis and scenario stress testing in valuations, while companies should optimize capital structures and tax planning, improving compliance transparency to reduce uncertainties caused by policy changes.