SAO PAULO, June 11 (Reuters) - The Brazilian government published on Wednesday an executive order altering taxes levied on investments, as well as a new decree walking back part of the recently announced hikes on the IOF tax on financial transactions.

The government had announced in May the increase of the IOF tax, including on credit and foreign-exchange transactions, to boost public revenues.

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The move triggered strong pushback from both Congress and market players, prompting the government to seek an alternative path as lawmakers threatened to overturn the measure.

A revised version of the IOF decree was published on Wednesday evening, partially or fully backtracking on several hikes to the rate, including on IOF levies on credit to companies and on the so-called forfait operations.

As part of the alternatives to the IOF hike, the government also published an executive order, which will need Congress' approval to remain valid, with measures including broad changes on income tax on financial investments, as well an increase in the tax rate on sports betting firms' revenue.

Among the changes to investment taxes, the government will now set the rate on investment income and capital gains, including stocks and bonds, at 17.5%, replacing the current sliding scale of 15% to 22.5%.

It also sets a 5% income tax on investments currently except from income levy, and raises the income tax rate levied on so-called interest on equity (JCP) payments to 20% from 15%.

The finance ministry did not release an estimate of the financial impact of the measures in its budget.

https://www.reuters.com/world/americas/brazil-government-revises-iof-taxes-after-pushback-tweaks-investment-levies-2025-06-12/