President Luiz Inácio Lula da Silva signed into law on Wednesday (21) a bill that forgives federal debts owed by individual micro-entrepreneurs (known in Brazil as MEIs) contracted up to October 13, raises the category's annual revenue cap to R$ 140,000 in 2028 and allows hiring up to two employees in certain activities. The MEI is a simplified tax regime for Brazil's smallest one-person businesses. The lower house approved the text on October 14 and the Senate the following day, sending it unchanged for presidential sanction.
Estimates presented during the bill's passage put the forgiveness at roughly R$ 12.6 billion in debts owed by about 3.6 million entrepreneurs, according to G1. The Ministry of Entrepreneurship (MEMP) cites a higher figure, over R$ 15.5 billion forgiven, with an average debt of R$ 3,400 per entrepreneur, and says the full package could reach 17.6 million MEIs nationwide. The amnesty covers principal, interest, fines and charges, including debts not yet formally registered as overdue federal debt. To keep the benefit, entrepreneurs must pay their monthly tax slips on time for the six months after the law takes effect on January 1, 2027, and drop any lawsuits contesting the debts. Amounts already paid will not be refunded.
Revenue cap rises in two steps; category may have two employees
The revenue ceiling has been frozen since 2018, at R$ 81,000 a year according to the MEMP (G1 cites R$ 80,000). Under the new law it rises to R$ 110,000 on January 1, 2027 and to R$ 140,000 on January 1, 2028. During floor debates, the bill's rapporteur, Congressman Rubens Pereira Júnior (PT-MA), said the outdated cap led entrepreneurs to turn down work: "This MEI sometimes passes up a contract so as not to exceed the MEI bracket." The text also creates mechanisms for companies that were pushed out of the regime to return to MEI status.
On hiring, businesses in industry, commerce and rural services will be allowed up to two formal employees, up from one today. Wages are capped at one national minimum wage or the professional category's floor. Other segments keep the current one-employee limit. The package also exempts so-called NanoMEIs from the obligation to issue invoices.
Announcing the signing on Tuesday (20) at an event in São Luís, in Maranhão state, Lula said the goal is to clear entrepreneurs' names: "We decided to grant amnesty to clean these people's names at Serasa so they can start a new life," he said, referring to Brazil's main credit bureau. In parallel, the government folded MEIs' private debts into the Desenrola 3.0 renegotiation program: under Provisional Measure 1,393/2026, the Finance Ministry will hold auctions starting in November to buy around R$ 6 billion in debt portfolios at a minimum 90% discount, which is expected to benefit more than 1.6 million delinquent micro-entrepreneurs, according to the MEMP. A separate proposal for a non-repayable grant of up to R$ 5,000 per business still needs congressional review and is not part of the signed law.
For Luis Otávio Leal, chief economist at G5 Partners, interviewed by G1, debt renegotiation programs only relieve the problem temporarily unless paired with cheaper credit and financial education, since many MEIs mix business and household accounts. On the side of those who produce and sell, the law clears credit records, reopens access to financing and gives room to grow without moving into a costlier tax regime. On the other side, customers and suppliers will deal with more formalized small businesses, with registered employees and less risk of closing over old debts. The cost falls on the Treasury, which gives up revenue estimated between R$ 12.6 billion and R$ 15.5 billion.