Brazil's Chamber approves higher municipal transfers and creates South and Southeast regional funds

The special commission of the Brazilian Chamber of Deputies approved, by unanimous vote, a constitutional amendment (PEC 231/19) that raises the Union's share of the Municipal Participation Fund (FPM) by one percentage point, from 2% to 3% of the distributed amount. The amendment also creates two new constitutional financing funds for the South and Southeast regions, each receiving 1% of federal revenue to support local productive sectors.

Deputy Arnaldo Jardim emphasized that the FPM boost is essential for municipalities facing growing social demands, stating: "All the new policies have shifted responsibilities to states and municipalities, so the advance in the FPM is relevant." The proposal projects an annual contribution of about R$5.35 billion per fund in 2027, rising to roughly R$11.2 billion in 2028, with a phased rollout – 0.5% starting January 2027 and the full 1% from January 2028. The amendment now moves to a two‑round vote in the Chamber plenary before proceeding to the Senate.