Brazil Senate approves debt forgiveness and higher revenue limits for MEIs

The Brazilian Senate has approved Complementary Law Project 186/2026, a key component of the Prospera MEI package aimed at supporting microentrepreneurs. The legislation, which now awaits presidential sanction, includes the full forgiveness of federal tax debts for MEIs registered in the Union's Active Debt until October 2026. This measure is estimated to benefit approximately 3.6 million entrepreneurs and cover roughly R$ 12.6 billion in debts, including interest and fines.

Additionally, the bill introduces a gradual increase to the annual revenue ceiling for MEIs. The current limit of R$ 81,000 will rise to R$ 110,000 in 2027 and reach R$ 140,000 by 2028. The package also allows MEIs to hire up to two employees instead of one, provided they are paid at least the minimum wage or the professional category floor.

While the measures offer significant relief, experts have raised concerns regarding fiscal risks and potential electoral implications. Specifically, the proposed 'PixMEI'—a direct government transfer of up to R$ 5,000 to entrepreneurs—has been flagged by legal specialists as potentially violating electoral laws that prohibit the free distribution of public funds during election years.