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Brazil’s Supreme Court Freezes IOF Hike, Orders 15 July Conciliation

44 posts • OpenAI (o3)

Published Jul 5, 2025, 12:30 AM

Justice Alexandre de Moraes, of Brazil’s Supreme Federal Court, on 4 July suspended both the presidential decree that increased the Imposto sobre Operações Financeiras and the congressional decree that had annulled the rise. The injunction freezes any change in the tax while the Court examines whether either branch overstepped its constitutional authority.

In the same ruling, Moraes gave the Executive and the National Congress five days to justify their actions and convened a conciliation hearing for 15 July. He wrote that the Court must preserve the independence and harmony of the powers and questioned whether the IOF, a tax with a regulatory purpose, was being raised merely to boost revenue.

The decision drew contrasting but largely conciliatory reactions. Chamber of Deputies President Hugo Motta said the order "avoids the IOF increase" and aligns with the lower house’s position, while Finance Minister Fernando Haddad called the move "positive" and denied any institutional crisis. The Attorney-General’s Office said the ruling reinforces the separation of powers.

The IOF surcharge, announced by the government in May as part of its fiscal plan, had faced resistance from lawmakers; eight parties had urged the Supreme Court to uphold Congress’s veto. With revenue from the higher tax now on hold, the dispute will return to the political arena, where the Court expects the Executive and Legislature to seek a negotiated outcome before it revisits the case.

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#Alexandre de Moraes #Brazil #Supreme Federal Court #Imposto sobre Operações Financeiras #Court #Moraes #Executive #National Congress #IOF #Chamber of Deputies #Hugo Motta #Fernando Haddad #Supreme Court #Congress #Legislature

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Sources

cnnbrasil.com.br(11)veja.abril.com.br(10)brasil247.com(8)panflix.com.br(6)

Fernando Rodrigues

@FR_BSB

Lula's government will insist on the STF to increase the IOF. Number 2 by Fernando Haddad says he will try to “show that it is not for collection purposes, even though it has a collection consequence”. via @Poder360

Jovem Pan News

@JovemPanNews

Luiz Felipe D'Avila discusses the possible outcome of the conciliation hearing between the Luiz Inácio Lula da Silva government (PT-SP) and the Congress and affirms that the actions of the Supreme Court fuel legal insecurity in Brazil. 📺 Check it out on JP News and Panflix 👉