In the article published here sheet (“The government’s narrative won’t stick,” 11/10) Columnist Marcos Lisboa suggested that the federal government is proposing or defending measures that would increase the distortions created by exempt securities, particularly agribusiness letters of credit (LCA) and real estate (LCI). This discussion needs a little more substance and factual order.
The exemptions for these titles were created in 2004 when Marcos Lisboa was Secretary of Economic Policy and were intended to attract private resources to finance strategic sectors. These bonds are widespread, and their expansion has accelerated in recent years. In September 2025, the outstanding balance of exempt bonds amounted to R$1.9 trillion, and the estimated annual tax expenditure amounted to approximately R$40 billion.
This growth has exposed an imbalance. Many financial institutions began to use backing operations unrelated to the original purpose of public policy, and the difference in profitability on taxable securities created asymmetry, reducing the attractiveness of securities such as NTN-B, which led to the prolongation of public debt. To compensate for this distortion, the Treasury is forced to increase the profitability of these securities, making debt more expensive. The progressivity of taxes will eventually be undermined.
The federal government was not silent either. On the contrary, it worked to correct distortions and suggested adjustments to the possible variables of quantity and price. In 2024, the National Monetary Council (CMN) has significantly limited emissions. Resolutions 5,118 and 5,119 prohibited the use of guarantees unrelated to agricultural and real estate policy and restricted agribusiness certificates of accounts receivable (CRA) and real estate (CRI). The effects were immediate, with LCA emissions down by 23.7% and LCI emissions down by 31.5% in real terms compared to 2023.
In 2025, the government submitted MP 1,303 to Parliament, proposing a 5% income tax rate for tax-exempt securities and a flat rate of 17.5% for all other securities, and eliminating period discrimination. Therefore, long-term government bonds, which were previously subject to a maximum tax rate of 22.5%, will now be subject to a lower flat tax rate.
The objective was to reduce asymmetries, improve inventive step and maintain incentives for productive investment. However, during the process, Congress chose to maintain the exemption and set the interest rate on other securities at 18%.
Therefore, criticism that the federal government has not made efforts to correct distortions is false. On the contrary, they adopted whatever means were within their reach to solve one part of the problem, succeeded, and proposed to Congress a proposal that included other parts of the solution. The outcome of the legislative process is part of democracy and reflects the interrelationships of forces currently prevailing within this power.
Reviewing tax incentives is currently one of the Treasury’s priorities. The Payroll Tax Relief Solution and Perce finalization are notable examples, as is the proposed 10% linear reduction in tax benefits submitted to Congress. However, it is clear that tax incentives can be a valid and effective tool, as long as they are monitored, reviewed and improved over time.
The key is to create an institutionalized process for monitoring, evaluating and reviewing tax incentives shared between the executive and legislative branches, with enforcement mechanisms for effective review. Simplified solutions to complex problems only work in theory. That’s the real story that doesn’t stick.
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