Raising ceiling for MEIs distorts program and fuels Social Security deficit

The federal government presented to Congress in June a Bill that provides for raising the annual revenue ceiling for the Individual Microentrepreneur (MEI), going from the current R$ 81 thousand to R$ 110 thousand in 2027 and to R$ 140 thousand in 2028. The article states that raising the ceiling distorts the original MEI program and fuels the Social Security deficit. The bill has not yet advanced in legislative proceedings. The government's economic team has already included in next year's budget proposal an estimate of additional tax revenue loss of R$ 1.6 billion resulting from this change, totaling R$ 13.1 billion for the program. By including this measure in the Budget, the government avoids the need to present compensations if the ceiling expansion is approved by Congress.