BRAZIL · ECONOMY
Key Facts
- The country Brazil, Latin America’s largest economy, where millions of street vendors, drivers and freelancers work as registered one-person companies.
- What happened On Thursday 15 October, Brazil’s Senate voted 78 to 0 for debt relief and a higher revenue cap for those one-person firms.
- The debt relief The debt relief fully forgives federal debts of micro-entrepreneurs up to 13 October 2026, whether or not they were already listed as overdue.
- The new cap Yearly revenue allowed rises from R$81,000 (about US$16,000) to R$110,000 (about US$21,800) in 2027 and R$140,000 (about US$27,700) in 2028.
- The numbers The government counts about 3.6 million firms with registered debts of R$12.57 billion (about US$2.5 billion).
- Next step The bill goes to President Lula for his signature; the Chamber of Deputies passed it a day earlier, 461 to 4.
- Power Index Brazil ranks 1st of 14 in The Rio Times Latin America Power Index, with 75.0 points (October 2026 edition).
Prediction markets · who wins the runoff
Implied chance of winning Brazil’s presidency on 25 October, from traders’ prices.
Polymarket
Flávio Bolsonaro 79.2% · Lula 20.5% (US$184 million traded)
Kalshi (regulated in the US by the CFTC)
Flávio Bolsonaro 79% · Lula 22%
As of 16 October, 2:00 am ET (07:00 Lisbon), updated every 20 minutes. Prices are bets, not polls, and can move fast.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
Brazil’s Senate voted 78 to 0 on Thursday 15 October for debt relief that forgives federal debts of one-person companies. About 3.6 million of them have registered debts, and the same bill lifts their yearly revenue cap, known as the MEI limit.
The vote came ten days before President Luiz Inácio Lula da Silva’s runoff on Sunday 25 October against conservative senator Flávio Bolsonaro. For US investors who hold Brazilian bonds or the real, it adds a spending measure with a price tag to a tense campaign.
What the Senate Approved
The Senate, Brazil’s upper house, approved Complementary Bill 186 of 2026 on Thursday evening, according to Agência Senado, its own news service. Not one senator voted against it.
The Chamber of Deputies, the 513-member lower house, had passed the same text on Wednesday 14 October by 461 votes to 4. After the two votes, only the president’s signature is missing before it becomes law.
The government of President Lula, a member of the left-wing Workers’ Party (PT), sent the plan to Congress under constitutional urgency. Senators of the conservative Liberal Party (PL), the party of the Bolsonaro family, backed it while questioning the timing.
Who the Debt Relief Covers
The MEI, short for microempreendedor individual, is a legal form for one-person businesses such as street vendors, delivery riders and hairdressers. It lets them issue invoices and pay one small monthly fee that covers tax and social security.
The debt relief forgives in full the federal debts these firms owe up to 13 October 2026, listed as overdue or not. The government counts about 3.6 million firms with registered debts of R$12.57 billion (about US$2.5 billion).
The debt relief is not unconditional, because a micro-entrepreneur must pay the contributions that fall due in the six months after the law takes effect. If a firm misses them, the forgiveness is cancelled.
Firms must also file a request and withdraw any lawsuits over the forgiven debts. Once a case is closed, they owe no lawyers’ fees.
A Higher Revenue Cap and a Second Employee
Currently an MEI may earn at most R$81,000 (about US$16,000) a year, at about 5.05 reais to the dollar on 16 October 2026. The bill lifts the limit to R$110,000 (about US$21,800) in 2027 and R$140,000 (about US$27,700) in 2028.
Senator Carlos Fávaro of the centrist Social Democratic Party (PSD), the bill’s rapporteur in the Senate, said it affects about 17 million micro-entrepreneurs. He called the scheme one of the most important public policies for bringing small workers into the formal economy.
The bill also lets a micro-entrepreneur hire two employees instead of one in industry, commerce and services, including rural activities. Each must be paid the minimum wage or the wage floor of the trade.
How Brazil’s Politics Shaped the Vote
Government and opposition agreed on the substance, but not on the motives. Senators Carlos Portinho and Rogério Marinho, both of the Liberal Party, said the government is using the update for electoral purposes, as Agência Senado reported.
They argued that updating the limits is a government duty that is years overdue. Senator Tereza Cristina of the Progressive Party (PP) called the higher limit a long-standing demand of the micro-entrepreneurs themselves.
The two votes came on consecutive days, Wednesday in the Chamber and Thursday in the Senate. That left the president only the signature to give before the runoff.
What It Means for You
If you invest in Brazil, the debt relief and the later cap increase mean less federal revenue, ten days before a closely watched vote. It is one more pre-election measure that bond and currency traders will weigh.
If you freelance or start a business in Brazil, the higher cap lets a registered one-person company grow longer before a costlier tax regime applies. Our guide on who qualifies for Brazil’s MEI debt relief explains the scheme for newcomers.
What Is Not Known
The president has not said when he will sign the bill, and the law takes effect only after publication in the official gazette. No official estimate of what the measure will cost the federal budget has been given.
The government’s estimate covers 3.6 million firms with registered debts, not all 17 million micro-entrepreneurs. How many will actually file for debt erasure after the law takes effect is not yet known.
More: Brazil news in English, every day from The Rio Times.
Frequently Asked Questions
What did Brazil’s Senate approve on 15 October?
It approved debt relief, a bill that forgives federal debts of micro-entrepreneurs up to 13 October 2026 and raises their yearly revenue cap. The vote was 78 to 0.
How much can a micro-entrepreneur earn under the new rules?
The yearly cap rises from R$81,000 (about US$16,000) to R$110,000 (about US$21,800) in 2027. In 2028 it reaches R$140,000 (about US$27,700).
Who benefits from the debt relief?
The government counts about 3.6 million micro-entrepreneurs with registered federal debts totalling R$12.57 billion (about US$2.5 billion). They must keep paying their dues for six months to keep the benefit.
Is the bill already law?
Not yet, because President Lula must still sign it. Both houses of Congress have passed the text.
Sources: Agência Senado, 15 October 2026; InfoMoney, 15 October 2026; Hoje em Dia, 15 October 2026.
Editorial responsibility: Matthias Camenzind, Editor-in-Chief · Editorial standards · Report an error
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