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Unafisco Study Reveals Growth of Tax Exemptions, Details Concentrated Benefits, and Shows How the Brazilian Tax Structure Amplifies Historical Distortions
A study released in 2025 placed one of the most sensitive topics in the Brazilian economy back in focus. The tax incentives granted by the federal government are expected to exceed R$ 900 billion in 2026, according to a report by the National Association of Federal Tax Auditors (Unafisco Nacional).
According to the organization, these amounts represent resources that do not enter public coffers due to exemptions, reductions, and tax treatments provided for by law. Thus, specific economic sectors, regions, and groups of taxpayers receive these benefits.
According to Unafisco, a significant portion of these exemptions does not present proven economic or social counterbalances. As a result, fiscal imbalance increases and distortions in the tax system deepen.
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Privilege Meter Exposes the Dimension of Tax Privileges
The study uses the “Tax Privilege Meter” to measure lost revenue from benefits considered excessive. According to the data, about R$ 620 billion of the total projected for 2026 falls under tax privileges.
In addition, Unafisco points out that a significant part of these incentives is not included in the Tax Expenditure Demonstration (DGT), published annually by the Federal Revenue Service. Therefore, the real impact of the exemptions exceeds official numbers.
Among the main benefits identified are the exemption from taxation on profits and dividends, the absence of taxation on large fortunes, as well as incentives for the Simples Nacional and the Manaus Free Trade Zone. Also included are benefits for the basic food basket and special installment plans granted in previous years.
In light of this scenario, the debate gained momentum throughout 2025, especially in discussions about fiscal responsibility and the sustainability of public accounts.
Government Approves Stricter Rules for Exemptions
In response to the growth of exemptions, the National Congress approved a bill in 2025 that reduces tax exemptions starting in 2026. Additionally, the new legislation imposes stricter criteria for future grants.
From now on, the government must present estimates of beneficiaries whenever it grants, expands, or extends incentives. It will also need to set performance targets and create transparency and monitoring mechanisms.
According to the federal government, the measure aims to limit benefits without proven return and strengthen control over the state’s indirect expenses.
Taxation of Profits and Dividends Holds the Greatest Potential
For Unafisco, the main fiscal benefit currently in the country is the exemption on the distribution of profits and dividends to individuals, adopted since 1995. In this context, the entity estimates that taxing these earnings could generate approximately R$ 150 billion per year.
The economist Sérgio Gobetti from the Institute of Applied Economic Research (IPEA) projects annual revenue greater than R$ 100 billion. He considers average rates practiced in OECD countries.
Data from the Tax Foundation indicate that, in 2024, the average rate on dividends in the OECD reached 24.7%. Brazil remains among the few countries that maintain a zero rate.
Starting in January 2026, the Brazilian government will begin taxing monthly incomes above R$ 50,000. The rate will be progressive and may reach 10%. Additionally, dividends will be included in the taxation of an individual’s global income.
Even after the adjustments predicted in Bill No. 1087/2025, signed by President Luiz Inácio Lula da Silva, Unafisco estimates that the privilege associated with the exemption will still reach R$ 146.1 billion.
Tax on Large Fortunes Broadens Divergences
The study also highlights the absence of the tax on large fortunes, provided for in the Federal Constitution of 1988, but still not regulated. In Unafisco’s proposal, the tax would apply to net assets above R$ 4.6 million.
In this model, about 220,000 taxpayers would be affected, which represents 0.1% of the Brazilian population. Thus, the potential revenue for 2026 could reach R$ 100 billion.
Institutions such as the World Bank and the Minister of Finance, Fernando Haddad, advocate for the proposal. On the other hand, critics warn of risks of asset evasion and capital flight.
Tax Structure Maintains Historical Distortions
Recent data from the Federal Revenue Service shows that Brazil heavily relies on taxes on goods and services, which burden the lower-income population more. At the same time, taxes on income, profits, and wealth collect less than the average among developed countries.
According to the World Bank, the tax burden on companies and on payroll remains high. Charges such as FGTS and contributions to the S System increase this burden.
In this scenario, economists assess that taxing profits and dividends could open up space for adjustments. Among them, the reduction of consumption taxes or the decrease of the corporate income tax (IRPJ), which would increase the progressivity of the system.
Similar proposals advanced in the Chamber of Deputies in 2021 during President Jair Bolsonaro’s administration but did not progress in the Senate. In 2025, the Ministry of Finance acknowledged that a comprehensive income tax reform will be necessary.
With billion-dollar incentives and growing pressure on the public budget, should Brazil prioritize cutting tax privileges or advance towards a deeper tax reform to reduce structural inequalities?
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