Industry reacts to changes in IOF and demands cuts in public spending

Entities representing the Brazilian production sector have reacted with criticism to the provisional measure issued by the federal government on June 11, which is part of the new fiscal package and proposes changes to the decree that increased the Tax on Financial Transactions (IOF) . Industry federations classify the IOF changes as "untimely, complex and harmful" to the business environment.

While the Lula (PT) government considers the measure essential to balance public finances, the national production sector argues that the package increases the tax burden. The collection is in exchange for economic growth. Despite backing down on the IOF increase, the government proposed changes with a lasting impact.

Finance Minister Fernando Haddad defends the package as a fiscal adjustment and correction of distortions. Congress reacted . The Chamber approved, by 346 to 97, the urgency to vote on the repeal of the decree. The analysis of its merits has not yet been scheduled.

The National Confederation of Industry (CNI) believes that the government's proposals for changes to the IOF will harm investments in the production sector. The agency points out that Provisional Measure 1,303/2025 prioritizes increasing revenue, containing few and insufficient initiatives to reduce public spending .

“The productive sector can no longer afford to pay the bill for fiscal adjustment. We need to balance the public budget with long-term structural measures. This initiative penalizes companies and, in the same way, the country’s growth,” says CNI president Ricardo Alban.

São Paulo industry demands spending cuts in the Legislative and Judiciary branches

For the Federation of Industries of the State of São Paulo (Fiesp) , the federal government seeks to balance public accounts without engaging in dialogue with society . Fiesp advocates a structured national plan. The president of the institution, Josué Gomes da Silva, also holds the legislative and judicial branches responsible for the fiscal imbalance.

“Congress criticizes the government’s proposals for changes to the IOF, already anticipating electoral positions, does not offer alternatives and still pretends not to be one of the main parties responsible for the imbalance in public accounts. The parliamentary amendments represent 25% of the discretionary budget and reached the exorbitant value of around R$50 billion”, highlights the leader of representation in the São Paulo industry.

Silva adds that the Judiciary “will not give up its financial advantages, which lead to remuneration above the constitutional salary ceiling”, while “industries seek to survive through tax breaks and sectoral subsidies”. He warns that, if there is no search for an understanding to build a national project, “we will all sink together”.

Paraná criticizes tax increases "every 37 days"

The Federation of Industries of the State of Paraná (Fiep) has joined the protests and released a manifesto against the proposals of the Lula government. In the text released to the public, Fiep highlights the "courage of those who open the doors of a company every day, even with the noose tightening around their necks" and says it is in mourning for "job creation, which succumbs to each new tax and for family income, which shrinks in the face of inflation and the abusive tax burden."

The president of Fiep, Edson Vasconcelos, criticizes that the measures proposed by the federal government go against what the country needs and compromise the competitiveness of the Brazilian productive sector . "The current government increases or creates new taxes, on average, every 37 days and the sacrifice is always imposed on the taxpayer, especially the productive sector, which is the one that actually generates wealth", says Vasconcelos. The data was confirmed by the coalition of parliamentary fronts , which represents the productive sector in Brazil.

The president of Fiep celebrated the positive reaction that led to the significant vote in the Chamber of Deputies for the urgent regime to deal with the proposal that suspends the effects of the IOF decree. "It clearly demonstrates that there is no more room for tax increases in the country , and that the government needs to do its part in cutting spending," he points out.

Federal government "systematically resorts to tax collection strategies", criticizes SC industry

The Federation of Industries of the State of Santa Catarina (Fiesc) states that the measures proposed by the federal government discourage productive investments and worsen the difficulties faced by those seeking to undertake business in Brazil. “It is unacceptable that, faced with the need to adjust public finances, which are deteriorating rapidly, the federal government systematically resorts to tax collection strategies. This path, in addition to being ineffective, is dangerous: it compromises the business environment, reduces competitiveness and suffocates precisely those who support the country - the productive sector,” states the president of Fiesc, Mario Cezar de Aguiar.

According to him, by insisting on increasing the country's tax burden - one of the highest among emerging countries - the Lula government is penalizing those who generate wealth, jobs and revenue. "The true path to fiscal balance lies in a profound reform of public spending , which promotes efficiency, combats waste and reinforces responsibility in the allocation of resources. The country needs to break this cycle", says Aguiar.

Goiás and Minas Gerais classify IOF changes as a blow to industry

In turn, the Federation of Industries of the State of Goiás (Fieg) advocates tax reforms that attract investment and reduce public spending. “This is a blow to industry. We demand accountability. The National Congress must block these measures and ensure a broad and technical debate.”

The president of the state federation, André Rocha, was another voice defending that Brazil needs reforms that reduce costs, simplify the tax system and attract investment "not more taxes and uncertainty", he emphasized. "The industry wants to talk, but it will not give up demanding serious and sustainable policies. Enough populism . It is time to prioritize Brazil".

For the Federation of Industries of the State of Minas Gerais (Fiemg), the government is removing incentives for good financial management and companies' liquidity, and is compromising the productive sector's ability to reinvest. "A smaller increase in the IOF as announced will not solve the problem. The rates were already high and we will see a new increase in the cost of credit and investments in Brazil," says the president of the representative sector of Minas Gerais, Flávio Roscoe.

"Anyway, it's the same old saying: if the government spends more, it has to collect more and society will pay more. Charging those who were already in debt seems unfair to me . IOF is a regulatory tax, not a revenue tax," he says.

RS industry also points out damage to international competitiveness with changes in IOF

The union of the productive sector in the demonstrations was also evident with the demonstration of the Federation of Industries of the State of Rio Grande do Sul (Fiergs), which also pointed out that the federal government's measures harm the competitiveness of the industry, "a productive sector already strangled by abusive interest rates and expensive financing".

The president of the entity, Claudio Affonso Amoretti Bier, points out that the consumer will also pay for the increase. “The adjustment in the rates on exchange transactions has a direct impact on the cost of imported inputs, machinery and equipment, essential elements for industrial production. Relevant export sectors in Rio Grande do Sul, such as footwear, meat and wine , may lose competitiveness in the international market,” he warns.