Moraes suspends decrees by Lula and Congress regarding IOF and schedules a conciliation hearing.
The objective is to find a negotiated solution to the legal and political crisis triggered by the recent changes in the IOF (Tax on Financial Operations) rules.
Paula Laboissière – Reporter at Agência Brasil
Supreme Federal Court (STF) minister Alexandre de Moraes suspended this Friday (4) the effects of decrees from the Presidency of the Republic and the National Congress that deal with the Tax on Financial Operations (IOF).
“I grant the precautionary measure, ad referendum of the plenary of this Supreme Court, to suspend the effects of presidential decrees 12.466/2025, 12.467/2025 and 12.499/2025, as well as Legislative Decree 176/2025.”
In his decision, Moraes also mandates a conciliation hearing between the federal government and the National Congress on the matter. The hearing is scheduled for July 15th in the court's hearing room in Brasília.
“Communicate to the President of the Republic and the President of the National Congress, for their awareness and immediate compliance with this decision, requesting information from them within five days.”
As stated in the decision, the Attorney General's Office (PGR) and the Attorney General's Office (AGU) must also participate in the meeting. "After the conciliation hearing, the need to maintain the preliminary injunction will be analyzed," the minister emphasized.
A rozhodão
In the document, Moraes emphasizes the importance of harmony between the branches of government, as well as their independence. He also cites "strong arguments that indicate the reasonableness of the immediate suspension of the contested decrees."
“Including because this undesirable clash between the measures of the Executive and Legislative branches, with successive and repeated antagonistic statements, strongly contradicts Article 2 of the Federal Constitution which, more than determining the independence of the powers, demands harmony between them, as a basic and inalienable principle of our Democratic State of Law in search of the common good for all Brazilian society.”
Understand
At the end of May, President Luiz Inácio Lula da Silva issued a decree that increased the IOF (Tax on Financial Operations). for credit, insurance, and foreign exchange operations. The document was part of measures developed by the Ministry of Finance to strengthen government revenues and meet the targets of the fiscal framework.
In early June, the government reversed some of the IOF increases, but issued a provisional measure (MP) that increases other taxes. Also in June, the decree was overturned. It was scheduled by the president of the Chamber, Hugo Motta.About two hours after being brought down, The decree was also rejected. in a symbolic vote in the plenary session of the Federal Senate.
Last Tuesday (1st), the Attorney General's Office (AGU) filed a lawsuit with the Supreme Federal Court (STF) In an attempt to reverse the overturning of the decree. According to the Attorney General, Jorge Messias, the declaratory action of constitutionality (ADC) was filed following a request made by Lula and based on a technical and legal study requested from the agency the previous week.
Minister Alexandre de Moraes was chosen as rapporteur. The AGU (Attorney General's Office) filed a Declaratory Action of Constitutionality (ADC) seeking to recognize the validity of the decree issued by the president. Moraes will lead the case because he already serves as rapporteur for two other cases dealing with the same issue. These actions were filed by the PL (Liberal Party) and PSOL (Socialism and Liberty Party). There is no date set for the minister's decision.
