Our partner Alberto Murray is attending the PLG International Lawyers partners’ meeting in Istanbul. Murray – Advogados is the Brazilian member firm of PLG.
ANEEL adopts compromise in years-long dispute over compensation for legacy grid assets, lowering electricity costs until 2028
06/11/2025
Decision almost halved claims of power generators, which were aiming for R$11bn
Brazil’s National Electric Energy Agency (ANEEL) approved on Tuesday (10) an intermediary proposal in the long-running dispute over compensation to power transmission companies for assets in the so-called Existing Basic Network System (RBSE). The decision, closely watched by power sector stakeholders, reduces transmission costs by R$5.6 billion between July 2025 and July 2028—savings that will benefit both consumers and generators.
The move aims to reconcile opposing interests in a battle that has dragged on for years. On one side, generators, self-producers, and large consumers—represented by groups such as Abrace (Association of Large Industrial Energy Consumers) and Abiape (Brazilian Association of Self-Production Energy Investors)—had pushed for a larger cut of about R$11 billion.
On the other side, transmission companies including Furnas, Chesf, Eletronorte, and Eletrosul (subsidiaries of Eletrobras), as well as Isa Energia, Cemig-GT, CEEE-GT, Copel-GT, and Celg-GT, defended maintaining the full indemnity values. Agnes da Costa, the board member who issued the deciding vote, said the ruling preserves compensation but adjusts future payments in favor of consumers.
“These are assets of transmission companies that, for a period, consumers weren’t paying for, weren’t compensating, and are now returning to the tariffs. There was controversy over part of that amount. Now, with this decision, the consumer will keep paying—but going forward, we can see there’s about a R$5 billion reduction between what was originally expected and what will actually be paid,” Ms. Costa told reporters.
While reading her final opinion on the case, Ms. Costa highlighted that the process demanded a thorough technical review due to the issue’s complexity, strong legal arguments on both sides, and the real risk of billion-real litigation.
“While not abandoning their legal theses, both sides expressed willingness to find a balanced outcome through a technically defensible solution based on prior technical analyses—one that delivers immediate benefits to consumers and minimizes legal risks.”
The central controversy surrounded the methodology for calculating owed amounts, particularly with regard to return on invested capital in those assets. Ms. Costa rejected arguments from dissenting votes that previous calculations contained methodological errors, reaffirming the technical soundness of the analysis conducted thus far.
The measure passed by a 3-2 vote, with support from Director-General Sandoval Feitosa and Acting Director Daniel Danna. The dissenting vote, previously proposed by former director Hélvio Guerra and backed by Fernando Mosna, called for changes to the calculation method and a deeper cut to compensation. Director Ludimila Lima did not participate in the vote, as she currently occupies Mr. Guerra’s former seat.
The case dates back to Provisional Measure No. 579/2012, issued during President Dilma Rousseff’s administration, which sought to reduce electricity costs. The measure altered the concession model for the power sector by requiring early and conditional contract renewals for generation and transmission operators. As a result, transmission firms that opted into the new model stopped receiving returns on assets still in operation and critical to the grid.
This created a financial imbalance in the contracts, which ANEEL acknowledged. In 2016, the agency mandated compensation for RBSE assets—a multibillion-real liability that has since been gradually incorporated into transmission tariffs. Consumers have been covering these indemnities through charges on their electricity bills.
*By Robson Rodrigues, Valor — São Paulo
Source: Valor International
https://valorinternational.globo.com/
Military pensions and cap on supersalaries among proposals left untouched
06/11/2025
At a time when Congress is pressing the executive branch to rein in public spending as an alternative to raising the Financial Transactions Tax (IOF), lawmakers themselves have yet to act on fiscal reform proposals already on the table—such as the cap on public sector “supersalaries,” which has seen little progress.
Public finance experts interviewed by Valor argue that Congress could contribute meaningfully to Brazil’s fiscal rebalancing by cutting back on parliamentary earmarks—a move that would represent a concrete step toward spending restraint. This year’s budget earmarks amount to R$50.5 billion, with an additional R$11.2 billion in discretionary executive expenditures added to compensate for unpaid transfers last year, bringing the total to R$61.7 billion.
In response, lawmakers have pledged to move forward with administrative reform, currently under discussion in the Chamber of Deputies and led by Federal Deputy Pedro Paulo (Social Democratic Party, PSD, Rio de Janeiro). However, several legislators caution that the bill is unlikely to emphasize cost-cutting. One influential leader of “Centrão” bloc in Congress told Valor that reform proposals should originate from the executive branch, although contributions from the legislative working group may also emerge.
Experts propose Congress take lead in trimming earmarks
The bill to curb “supersalaries”—by capping indemnity payments that push public servants’ pay above the constitutional ceiling—was passed by the Chamber in 2021 but remains stalled in the Senate. The deadlock stems from attempts to bundle it with the so-called “quinquennial PEC,” a constitutional amendment that restores a bonus for judges and exempts it from the salary cap.
Similarly, lawmakers have kept their distance from another contentious issue: military pension reform, which the government submitted in December 2024. Six months on, the bill remains untouched in the Chamber, awaiting assignment of a rapporteur. The proposal sets a minimum retirement age of 55 for military personnel—currently, there is no age requirement, and service members can retire after 35 years.
In 2023, military pension and retirement benefits posted a R$51.8 billion deficit, compared to R$304.6 billion for Brazil’s general social security system (managed by the National Institute of Social Security, INSS). During the Agenda Brasil – the Brazilian fiscal outlook seminar hosted by Valor, CBN Radio, and O Globo, Chamber President Hugo Motta (Republicans of Paraíba) pledged to review the matter. “We’ll do our part on this issue,” he said.
A government-aligned senator told Valor that many cost-cutting bills are already pending in Congress, but meaningful progress would require reciprocal efforts from the executive. “How can we reduce spending if no one’s willing to put in the effort?” he asked. “Once we show effort here, they need to show it there too. No one wants to give ground because of the power dynamics involved.”
Senate government leader Jaques Wagner (Workers’ Party, PT, of Bahia) noted that lawmakers are also reluctant to budge. “Hugo [Motta] made a good point. Everyone knows adjustment is needed, but no one wants to concede an inch,” he remarked. “Today [Tuesday, 10] I attended the Economic Affairs Committee (CAE) to follow debate on raising the physician salary floor. Everyone talks fiscal responsibility, then backs something that could cost R$40 billion,” he criticized.
Senator Efraim Filho (Paraíba), a leader of Brazil Union and chair of the Joint Budget Committee (CMO), said the government faces an uphill battle in passing its provisional measure offering alternatives to an IOF hike, especially if it only includes tax increases. “The government hasn’t really proposed spending cuts. It’s switching to revenue methods that cause less noise, but that’s not going over well,” he said. “The government has to negotiate with its own base to see what they’re willing to back. You can’t mention Fundeb [Basic education fund] or BPC [continuous cash benefit] without the PT jumping out of their seats.”
On another front, experts argue that cuts to parliamentary earmarks would send a strong message. While they believe the mechanism should be retained, they call for reforms to curb what they see as distortions in the budget process.
Last month, amid the IOF debate, Mr. Motta said congressional leaders were not “concerned” about reducing earmarks. He noted potential support for a cap—if it applies to all parties equally—but warned against “criminalizing” earmarks.
On Monday (9), after attending the Agenda Brasil seminar in São Paulo, Congressman Luciano Zucco (Liberal Party, PL, Rio Grande do Sul), leader of the opposition in the Chamber, also acknowledged the possibility of cutting earmarks, saying “Congress could lead by example.”
Political scientist Beatriz Rey, affiliated with the University of São Paulo (USP) and the Popvox Foundation, said Congress gained political power with the increase in earmarks but is not being held accountable for its share of fiscal responsibility. “The Faria Lima [financial market] crowd needs to start demanding fiscal discipline from Congress,” she said.
“Between 2015 and 2024, earmarks jumped from R$3.9 billion to R$48.3 billion. That’s an absurd increase, disproportionate to Congress’ role in the budget, encroaching on the executive’s prerogatives,” Ms. Rey added. She also called for Judiciary involvement in ending “supersalaries.”
“Congress needs to contribute directly by cutting earmarks,” said Felipe Salto, chief economist at Warren Investimentos. He supports a 50% cut starting in 2026. “Then we could consider a rule that makes earmarks, like other expenditures, subject to available fiscal space,” he suggested.
“We’re on the brink of a fiscal crisis. The situation is dire. Spending is outpacing revenue, partly because earmarks have become a new, virtually untouchable mandatory expense,” said Mr. Salto, former executive director of the Senate’s Independent Fiscal Institution (IFI).
Mr. Salto credited Finance Minister Fernando Haddad with making “a significant effort” to meet the fiscal target, while accusing Congress of “wavering.” He believes the IOF controversy is a chance for Congress and the executive to jointly define a list of measures to clean up public finances.
*By Andrea Jubé, Gabriela Guido, Joelmir Tavares and Beatriz Roscoe — Brasília and São Paulo
Source: Valor International
https://valorinternational.globo.com/
Employees with less schooling already average close to 36 hours per week, say researchers at FGV Ibre
06/10/2025
Adopting a shorter 36-hour workweek would primarily benefit more highly educated workers, further widening the real wage gap between them and those with lower levels of formal education. That’s the conclusion of a study by economists Fernando de Holanda Barbosa Filho and Paulo Peruchetti, researchers at the Fundação Getulio Vargas’s Brazilian Institute of Economics (Ibre-FGV).
They point out that less-educated workers already work closer to a 36-hour week— the central Constitutional Amendment Proposal (PEC) introduced by federal deputy Erika Hilton, which seeks to end the 6 x 1 work schedule.
According to the researchers, average weekly working hours in Brazil remain below the legal cap of 44 hours, standing at 38.4 hours in 2024. But among those with no formal education or incomplete elementary schooling, the average is already 36.2 hours. The average for those with complete elementary and incomplete high school education is 37.8 hours.
The longest working hours are concentrated among those with a high school diploma and incomplete college education, averaging 39.3 hours per week. Workers with a completed higher education clock in at 38.9 hours per week.
The data challenge the assumption that those with the lowest income and educational attainment—typically the focus of advocacy for reduced work hours—are the ones working the longest. According to Mr. Barbosa Filho, this is not borne out by the evidence.
Cutting working hours without reducing pay effectively raises the hourly wage of each worker. But in this scenario, too, the researchers argue that the most qualified employees stand to gain the most.
Mr. Barbosa Filho and Mr. Peruchetti estimate that workers with a high school diploma and incomplete college education, as well as those with a college degree, would see real wage increases of 9% and 8%, respectively.
By contrast, uneducated workers and those with incomplete elementary education would see their income rise by just 0.7%. Workers with a high school diploma and incomplete higher education would gain about 5%.
In a separate analysis, Mr. Barbosa Filho had previously estimated that, considering labor as the sole factor of production, a reduction in the workweek to 36 hours would result in a 6.2% decrease in total hours worked—and, by extension, in the value added to the economy. However, the impact would vary significantly across sectors, with estimated losses ranging from 1.4% to 14.2%, according to the researchers.
Sectors with longer average work hours, they argue, would face greater adaptation costs under the proposed change.
Transportation, extractive industries, and commerce currently lead in weekly work hours, averaging 42, 41.2, and 41 hours, respectively. The researchers project that cutting working hours would reduce value added by 14.2% in transportation, 12.6% in extractive industries, and 12.2% in commerce. Public Utility Industrial Services (SIUP—which includes the production of electricity, gas, and water) would see a 10.6% reduction, while information and communication services would experience a 10.5% drop.
Conversely, the sectors expected to suffer the smallest losses are “other services”—which comprise most services provided to families—and Public Administration (APU, which covers areas like defense, social security, education, health, and social services), with declines of just 1.4% and 1.7%, respectively.
The researchers note that these sectors already operate close to a 36-hour workweek. Still, Mr. Barbosa Filho questions whether businesses in “other services”—typically small entrepreneurs—could realistically reorganize their working hours. In the case of commerce, he adds, much of the workforce relies heavily on commission-based pay, complicating the shift.
Supporters of a shorter workweek often argue that productivity gains could compensate for increased labor costs. Mr. Barbosa Filho and Mr. Peruchetti estimate that in agriculture, for instance, historical productivity growth—5.2% per hour worked between 2012 and 2024—could offset potential losses. However, they point out that agricultural productivity is well above the national average, which has remained stagnant.
According to the researchers, even a 2% increase in hourly productivity would fall short of offsetting the losses in most sectors.
For the analysis by formal qualification, the researchers note they were unable to isolate the value added by different educational groups. Instead, they used the evolution of adequate hourly wages as a proxy for productivity growth across those groups, arguing that in competitive markets, wages should reflect productivity gains.
Between 2012 and 2024, the educational group that saw the highest wage growth was composed of workers with no education and incomplete primary education, whose hourly earnings rose by an average of 0.9% per year. Those with complete elementary education and incomplete secondary education experienced a 0.5% increase. In contrast, workers with complete secondary education and incomplete higher education saw their wages fall by 0.3%, while those with a college degree saw a decline of 1.1%.
“If we consider wage gains as a proxy for productivity gains, only lower-skilled workers recorded productivity growth during the period. Therefore, it is unlikely that productivity gains will offset the rise in hourly wages resulting from a reduction in working hours,” the study states.
The researchers also stress that their findings do not account for how employers might respond to a shorter workweek. Since this would raise unit labor costs (ULC), companies could be expected to reduce hiring, potentially resulting in job losses.
ULC represents the labor cost per unit of output—that is, the share of value generated that is allocated to employee compensation, explains Guilherme Zimmermann, an economist at Bradesco. “In recent years, productivity has shown modest or virtually no growth. In contrast, ULC has been rising steadily,” Mr. Zimmermann noted in a recent report.
According to him, virtually all real wage growth in the recent period has stemmed from increases in ULC, not from productivity improvements. “This imbalance suggests that wages have been growing faster than workers’ average productive capacity, which could exert further pressure on costs and prices if it continues,” he warns.
*By Anaïs Fernandes — São Paulo
Source: Valor International
https://valorinternational.globo.com
Of every R$10 that companies in the sector earned in 2024, a little over R$3 came from fixed broadband services
06/10/2025
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Fixed broadband is increasingly solidifying its position as the second-largest revenue source for the telecommunications sector in Brazil. Out of every R$10 earned by telcos in 2024, a little over R$3 was generated from fixed broadband services.
Overall, fixed internet access ranks just behind mobile telephony, which accounted for 41.2% of the sector’s gross revenue last year, or R$4.12 of every R$10 earned. This information is part of a report prepared by the telecommunications operators’ union, Conexis Brasil Digital.
According to the union, the sector’s gross revenue—adjusted by Brazil’s official inflation index, IPCA—grew by 2.7% last year compared to 2023, reaching R$318.8 billion. This growth was driven primarily by fixed broadband, but also by the strong performance of mobile telephony (with a +4% real growth) and the industry (equipment manufacturers, with +4.8%).
“What drove [this result] the most was fixed broadband, in terms of revenue. It had a real growth of 6.1%,” said Marcos Ferrari, the president of Conexis.
The mobile telephony segment, in turn, benefited from the continued expansion of 5G, Mr. Ferrari said. “We saw significant growth in the number of 5G terminals, in smartphones. We had about 20 million customers at the end of 2023 and reached 40 million by the end of 2024.”
In the same annual comparison, the number of cities with 5G coverage jumped to 812 from 352. Additionally, the total number of antennas compatible with the technology more than doubled during this period, rising to 37,000 from 18,400.
“The higher offering pushes up the demand. The more cities with 5G technology, the faster people adopt it,” Mr. Ferrari said.
Despite this, the mobile segment’s revenue has struggled to grow when examining the figures over the past five years, after adjusting for inflation. Brazil ended last year with 263.4 million active mobile phone lines, an increase of 29.3 million accesses since the end of 2020. However, the gross revenue generated by the segment in 2024 (R$131.5 billion) was lower than that recorded in 2020 (R$133.7 billion, adjusted for the IPCA).
Conversely, fixed broadband has been growing both in real gross revenue and the number of users. The total number of fixed connections increased by 43.2%, reaching 52 million, between the end of 2020 and the same period in 2024. In the same timeframe, the gross revenue rose by 29.3% in real terms, reaching R$96.7 billion.
This positive performance led to fixed broadband accounting for slightly more than 30% of the sector’s revenue last year, an increase of nearly seven percentage points compared to 2020. In contrast, the share of mobile telephony in the telecommunications revenue pie shrank, falling from 42.1% to 41.2% over the past five years.
Last year alone, the number of broadband connections via fiber optics grew by 13.5%, driven primarily by the expansion of this technology in the Northeast region (+15.7%).
The service is expected to advance further in 2025, driven by fiber optic expansion. “Fiber is not only used for fixed broadband. It’s expanding across the country to handle and transmit all the data from 5G,” Mr. Ferrari said. Fiber is also the gateway for operators to offer entertainment, security (self-monitoring), and home automation services to subscribers, among other offerings.
By April, there were 52.7 million fixed broadband accesses in the country, according to the National Telecommunications Agency (ANATEL), up 6% year over year.
Considering only fiber connections, this percentage rises to 9.3%. The current cycle of fixed broadband expansion seems likely to continue in 2025, supported by the country’s economic growth, and extend into the coming years.
*By Rodrigo Carro — São Paulo
Source: Valor International
https://valorinternational.globo.com/
Consumer prices index is up 5.32% in 12 months
06/10/2025
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Brazil’s official inflation rate slowed to 0.26% in May, down from 0.43% in April, marking the lowest reading for the month since 2023, when it reached 0.23%, according to the Brazilian Institute of Geography and Statistics (IBGE).
The result came in well below the median forecast of 0.34% from 30 financial institutions and consultancies surveyed by Valor Data, Valor’s financial data provider. It also undershot the lowest estimate in the range, which spanned from 0.29% to 0.43%.
Over the 12 months through May, the Broad Consumer Price Index (IPCA) rose 5.32%, compared with 5.53% in the 12 months through April. Market expectations compiled by Valor Data had pointed to a 5.40% increase, with projections ranging from 5.35% to 5.51%.
Despite the slowdown, the 12-month inflation rate remains above the upper limit of the target range set by the National Monetary Council (CMN) and pursued by Brazil’s Central Bank. The inflation target for 2025 is 3%, with a tolerance margin of 1.5 percentage points in either direction.
Among the nine expenditure groups that make up the IPCA, five posted slower increases from April to May: food and beverages (from 0.82% to 0.17%), apparel (from 1.02% to 0.41%), health and personal care (from 1.18% to 0.54%), personal expenses (from 0.54% to 0.35%) and communication (from 0.69% to 0.07%).
Household goods shifted into deflation, with prices falling 0.27% after rising 0.53% in April. Housing costs accelerated from 0.14% to 1.19%. Education maintained a steady pace at 0.05%, while transportation continued in deflationary territory, moving from -0.38% to -0.37%.
The Brazilian statistics agency calculates the IPCA based on the consumption patterns of households earning between one and 40 times the minimum wage, covering 10 metropolitan regions as well as the cities of Goiânia, Campo Grande, Rio Branco, São Luís, Aracaju, and Brasília.
Less widespread increases
Inflation was less widespread in May, with the diffusion index—which measures the share of goods and services that recorded price increases—falling to 59.7%, from 66.8% in April, according to Valor Data. Excluding food, a particularly volatile component, the index dropped to 59.8% from 64.1%.
Core inflation
The average of five core inflation measures monitored by the Central Bank eased to 0.30% in May from 0.50% in April, based on estimates from MCM Consultores. Over the past 12 months, the average of these core indicators edged down to 5.17%, from 5.26%.
*By Lucianne Carneiro — Rio de Janeiro
Source: Valor International
https://valorinternational.globo.com/
Companies prepare for end of tax incentives in 2033; impact on new projects already visible
06/09/2025
Brazil’s tax reform is beginning to influence corporate logistics strategies for new investments. The prospect of ending tax incentives and changing the point of tax collection starting in 2033 is already dampening interest in new projects in states that currently attract companies through generous fiscal benefits, according to business executives and consultants involved in the transition to the new model.
Among the states potentially affected, from the private sector’s perspective, are Santa Catarina, known for its import-related incentives; Goiás, which supports the pharmaceutical industry; Espírito Santo, which also favors imports and has attracted sectors like automotive and retail; and Minas Gerais, home to one of the most emblematic cases of tax incentives: the city of Extrema.
In Extrema, logistics operators say demand for existing warehouses remains strong, but appetite for new developments is waning.
According to Sérgio Fischer, CEO of Log CP, a developer and manager of logistics and industrial warehouses, clients have said that rental prices in Extrema were a “non-issue” and could be up to three times higher due to the significant cost reduction from tax incentives. Log CP previously owned a warehouse in Extrema but sold it and has no plans to return. “It’s a city with fewer than 60,000 residents and nearly the same amount of warehouse space as Cajamar (São Paulo), which serves Brazil’s largest city,” Mr. Fischer said.
On the other hand, demand is rising for warehouses closer to major consumer hubs such as São Paulo and Recife—a key logistics center for the Northeast—executives report.
Logistics operator Multilog, which has a R$900 million investment plan over the next three years, has decided to allocate more than half of that amount to São Paulo, largely due to the tax overhaul. “We’ve been getting many inquiries from clients who are already looking ahead to 2033. From that point forward, inventory will need to be closer to consumers. A natural realignment will take place,” said CEO Djalma Vilela.
Pedro Moreira, president of ABRALOG (Brazilian Logistics Association), said the reform is already affecting the price per square meter of fulfillment centers, which is rising around São Paulo and Recife. The Manaus Free Trade Zone, which will retain its incentives, is also drawing increased interest from companies, he said.
Indeed, prices are climbing in São Paulo, according to data from Colliers International. In Guarulhos, the average price per square meter for logistics projects reached R$37.80 in the first quarter of this year, a 16.6% increase compared to the same period in 2024. In Cajamar, prices rose 8.5%, to R$31.38. Even in Extrema, prices increased to R$28.65—a 5.3% rise year over year.
According to analysts and executives, the lack of a sharp correction reflects market resilience. Mr. Fischer pointed out that cities that grew thanks to tax incentives won’t become “ghost towns” overnight, as the market will adjust based on demand-driven pricing.
Moreover, a lengthy transition period lies ahead before incentives are phased out, noted Maurício Lima, partner at logistics consultancy Ilos. “No company will relocate while it can still enjoy the benefit.” He emphasized that current impacts are limited to new projects still in the planning stages.
Under the new rules, the transition away from the Tax on Circulation of Goods and Services (ICMS), the main instrument used by states, won’t begin until 2029 and will run through the end of 2032, noted Douglas Mota, a tax partner at Demarest. During this period, a compensation fund will reimburse companies for lost incentives.
Mr. Mota added that the reform’s impact comes not only from the loss of tax breaks, but also from the shift in the tax collection model—from the point of production or storage to the point of consumption. “They’ve tightened the screws on both ends.”
Long-term lease contracts may help smooth the transition. Mariana Hanania, director of market research at consultancy Newmark, noted that Extrema’s growth was driven largely by BTS (build-to-suit) contracts tailored to specific tenants. “These are long-term contracts with tenant guarantees,” she said, adding that new developments in those areas may now be limited.
Simone Santos, partner at consultancy Binswanger SDS, said the long timeline before the reform takes full effect still makes these regions attractive. “We’re still seeing major leases,” she noted, citing the announcement in late May of a fully pre-leased 40,000 square meters warehouse by Fulwood in Extrema.
These locations also offer other advantages, such as strong logistics infrastructure, skilled labor, established industrial ecosystems, and the local economy. Santa Catarina, for example, is expected to see limited impact, according to two executives with operations in the state.
Gustavo Serrão, CEO of Espírito Santo’s port authority Vports, acknowledged that the reform presents challenges for the state but said the government is investing in greater efficiency, and existing infrastructure supports business retention. “There’s an exit barrier. Incentives helped the state build a robust infrastructure, and the integrated supply chain is resilient,” he said. “The challenge now is to use the transition to boost productivity.” He also cited potential financial incentives from state banks to help attract investment.
The impact of the changes will vary across sectors. The most affected will likely be those in which tax considerations weighed heavily in project decisions; typically high-value, lightweight products like pharmaceuticals and electronics, Mr. Lima said. “Heavier products, like large appliances, already leaned more on logistics convenience than tax advantages.”
Some e-commerce firms and import-heavy sectors that traditionally benefited from incentives will also need to rethink their strategies, said Vilson Silva, CFO at ID Logistics.
“In 2033, the impact will be significant. From a logistics standpoint, this will be an improvement. Today, there are some irrational practices, like a client who produces in São Paulo, serves customers in São Paulo, but ships inventory to Goiás for storage, only to bring it back,” Mr. Silva said.
*By Taís Hirata and Ana Luiza Tieghi — São Paulo
Source: Valor International
https://valorinternational.globo.com/
Deepfake videos and synthetic content targeting elections and public figures prompt calls for urgent regulation ahead of 2026 polls
06/09/2025
The growing use of artificial intelligence to create highly realistic fake content has raised alarm bells within the Brazilian government, especially as the country approaches the 2026 general elections. Officials are particularly concerned with the manipulation of real data to produce convincing fake videos—spread widely on social media—that can mislead the public or facilitate digital scams. Authorities now frame the issue as not just an electoral or regulatory matter but one of public safety and national defense.
Three weeks ago, Valor reported on a case in Argentina where an AI-generated “deepfake” video may have influenced the results of Buenos Aires’ city council elections on May 18. The video, widely circulated the night before the vote, appeared to show former President Mauricio Macri endorsing Javier Milei’s party, even though Mr. Macri was in fact a political rival. The video used AI to reproduce Mr. Macri’s appearance and voice with striking accuracy.
The capital is a traditional stronghold of Argentina’s right wing. But when results came in, Mr. Milei’s party led with 30% of the vote, followed closely by the left-leaning Peronists with 27%. Mr. Macri’s party finished third, with just 16%—a surprising defeat in its own stronghold.
In Brazil, concerns have intensified after similar cases surfaced involving President Lula and Finance Minister Fernando Haddad. In one instance, a fake video circulated showing Mr. Lula supposedly announcing that the government would grant Bolsa Família cash-transfer benefits to women caring for reborn dolls—lifelike dolls that resemble newborns. The video used AI-driven lip-syncing to manipulate a real interview in which Mr. Lula was actually talking about soccer.
In another case, a fake video showed Mr. Haddad saying the government would tax pregnant women and pet dogs. The manipulated footage was based on a real speech where he had discussed taxing online betting platforms. These videos gain traction precisely because they combine authentic content with manipulated audio or visual elements, lending them false credibility.
Attorney General Jorge Messias, who leads the government’s effort to hold digital platforms accountable, told Valor that neither Brazil nor other countries are prepared for the chaos caused by AI, which he described as a “dystopian and unregulated technology.” He noted that while electoral technology has evolved, such as the now-regulated mass messaging systems used illegally in 2018, the role of AI in elections will be far more prominent in 2026.
In the meantime, AI is also being used in digital scams, many of which target vulnerable groups such as children, teenagers, and the elderly. A notable example was the so-called “Pix crisis,” when a false rumor spread that the government would tax the country’s instant payment system. Scammers took advantage by falsely charging fees for money transfers.
According to Mr. Messias, the lack of regulation has turned the debate over AI and digital platforms into an issue of public safety. “Street crime has moved onto the platforms,” he said. “These are the digital pickpockets.”
While the Supreme Court is currently reviewing platform liability, the issue is also being addressed in Congress. The Attorney General’s Office (AGU), in partnership with the President’s Chief of Staff and the Presidential Communication Secretariat (SECOM), is drafting new legislation to be submitted for President Lula’s approval before reaching Congress.
In the absence of stronger legislation, the AGU, through its National Office for the Defense of Democracy (PNDD), has been working to remove or flag false and criminal content on social media platforms. In December, the office secured the removal of 12 fake videos about Mr. Lula’s health from YouTube. At the time, the president was recovering from brain surgery following a fall, but some videos falsely claimed he had died. YouTube removed seven of the 12 flagged videos within 24 hours via an out-of-court process.
YouTube, which sees around 20 million videos uploaded daily, stated that it uses AI to identify potentially harmful or manipulated content, which is then reviewed by humans. Users can also report misleading videos, which may be removed or labeled as disinformation. The company emphasized that the use of AI alone does not necessarily constitute a policy violation and that each case is reviewed individually under its guidelines and user rights.
Between January 2023 and May 2025, the PNDD submitted 39 out-of-court takedown requests. Of those, 23 were fully granted, two partially accepted, six rejected, and eight remain pending. In court, five requests were granted, two were rejected, and five await a ruling.
Over time, the PNDD has found that applying a “disinformation” label is often more effective than removing content entirely. Labeling allows users to access the content while being explicitly warned about its misleading nature—a solution the platforms may find less invasive.
Meta, which owns Facebook and Instagram, did not comment when contacted.
*By Andrea Jubé — Brasília
Source: Valor International
https://valorinternational.globo.com/
Industry leaders say resurgence of the disease in the country is “only a matter of time”
06/09/2025
Brazil is transitioning from a vaccination-driven approach to one that depends on constant vigilance, according to CNA
Brazil’s recent upgrade in sanitary status opens new opportunities for cattle and pig farmers as well as meatpackers, but it also raises the stakes for surveillance and enforcement in rural areas. The main challenge is to keep the disease out of the herds and avoid having to resume vaccination.
Still, many players in the livestock chain believe the return of the virus is inevitable. The question is when it will happen—and whether Brazil will be ready to respond to such a sanitary emergency. Unlike poultry and pig farming, which are largely carried out in controlled environments, Brazil’s extensive cattle ranching in open pastures makes containment much harder.
Outbreaks in neighboring countries like Uruguay serve as warnings. Uruguay saw cases of foot-and-mouth disease (FMD) even after receiving certified FMD-free status without vaccination and continues to immunize its herds. In Germany, the disease reappeared after more than 40 years, though vaccination was not made mandatory.
“The question isn’t if FMD will return to Brazil, but when—and how we’ll respond,” said Emílio Salani, vice president of the National Union of the Animal Health Products Industry (SINDAN), who was involved for decades in negotiations for the gradual phaseout of vaccination. “If we hesitate and need to restart vaccination, timelines will be extended, and the entire chain will suffer major losses.”
Among neighboring countries, Venezuela is the main concern. It lacks official FMD status and offers little transparency about its situation. Bolivia, however, received FMD-free certification without vaccination from the World Organization for Animal Health (WOAH) last week. Argentina and Paraguay have not reported recent cases but continue to vaccinate.
Currently, studies show the virus is not circulating in Brazil, Mr. Salani said. But risks remain due to the movement of infected animals across dry borders, as well as smuggling and cattle theft. Infected goods or individuals arriving at ports and airports also pose a threat.
Mr. Salani said the ideal solution would be to create a “protective ring” on the Venezuelan border, including donations of vaccines and financial resources. “The dry borders are our Achilles’ heel. One sick animal is enough [to jeopardize our status],” he warned.
“The challenge is much greater because cattle roam and move through open environments,” said João Paulo Franco, livestock production coordinator at the Brazilian Confederation of Agriculture and Livestock (CNA). He noted that Brazil is transitioning from a vaccination-driven approach to one that depends on constant vigilance. He emphasized that this “active surveillance” will rely heavily on farmers to spot symptoms and quickly alert the authorities.
Mr. Franco said the key to maintaining FMD-free status will be individual traceability of cattle and buffalo. A federal government plan launched at the end of 2024 aims to identify all livestock within seven years.
Lack of personnel
The need to uphold high safety standards also involves increasing personnel and investment, said the National Union of Federal Agricultural Tax Auditors (ANFFA Sindical). The organization said the new scenario will require greater attention from the state and called for adequate infrastructure to support the “new and rigorous surveillance and sanitary control measures” that will be needed.
“This progress comes at a critical moment, when production could be at risk if Brazil moves forward with privatizing inspections—a measure that weakens food safety and undermines international trust in our inspection system,” said Janus Pablo Macedo, president of ANFFA Sindical.
The Agriculture Ministry recently hired 200 new auditors approved in the 2024 public exam and 240 animal and plant health technicians. The union is pressing for additional hires from the waiting list, citing a shortage of professionals and increasing demand from the agribusiness sector.
Roberto Perosa, president of the Brazilian Meat Exporters Association (ABIEC), said a proposal to allow companies to conduct carcass inspections before and after slaughter—under the supervision of federal auditors—could benefit the sector. The idea, which is still under discussion at the Agriculture Ministry, has drawn criticism from the union.
Mr. Perosa also supports having agribusinesses contribute to the fund used to pay overtime for public inspectors in this area.
The journalist traveled at the invitation of ABIEC.
*By Rafael Walendorff — Paris
Source: Valor International
https://valorinternational.globo.com
Agreement negotiated by Finance minister includes tax hike on bets, ending breaks for LCI and LCA
06/09/2025
After a five-hour meeting, Finance Minister Fernando Haddad and congressional leaders agreed on a package of measures designed to offset the revenue loss from partially scaling back a decree that raised the Financial Transactions Tax (IOF). The proposals include higher taxes on sports betting and the elimination of the income tax exemption for LCI and LCA fixed-income securities. Broader structural measures, such as cuts to tax benefits not enshrined in the Constitution and administrative reform, were also discussed.
The more immediate proposals will be implemented via a provisional measure (MP), which takes effect immediately but must still be approved by Congress. In the case of ending the income tax exemption for LCI and LCA, the change would take effect in 2026 due to Brazil’s fiscal annuality rule.
The new MP would allow the government to reissue the IOF decree with lower tax rates. These changes still require approval from President Luiz Inácio Lula da Silva, who is due to return from France on Monday evening (9).
The revised plan is expected to reduce the fiscal impact of the IOF decree by one-third. According to the Finance Ministry, this shortfall will be offset by the MP. In its current form, the decree was projected to generate R$19.1 billion in 2025 and R$38.2 billion in 2026.
The government presented the new proposals after intense backlash from lawmakers, who threatened to overturn the original decree. Chamber of Deputies Speaker Hugo Motta said the alternative measures are less harmful than the original tax hike.
“The MP provides the government with financial compensation, but it’s much less damaging than the continuation of the original IOF decree. Plus, we’ve opened the door for a broader and more meaningful debate on tax exemptions,” Mr. Motta said.
One key element of the MP is raising the tax rate on Gross Gaming Revenue (GGR) from 12% to 18%, aligning with the government’s original proposal to regulate the betting sector. GGR refers to the total amount wagered, minus the payouts to players.
Another measure targets incentives for LCI and LCA investments. According to Mr. Haddad, these instruments—currently exempt from income tax—will now be taxed at 5%. “These securities will no longer be tax-free but will still enjoy significant incentives. We’re narrowing the gap between 0% and 17.5% down to 5%,” he explained.
The MP will also standardize the Social Contribution on Net Profit (CSLL) paid by financial institutions. The preferential 9% rate for fintechs will be eliminated, leaving the standard rates of 15% and 20%.
Under the revised IOF decree, one significant change involves the tax on reverse factoring—a form of early payment to suppliers by banks. This measure had drawn strong criticism from the financial and retail sectors.
“The most affected part of the IOF will be on risco sacado. The fixed component of this tax will be removed, and the daily rate will be recalibrated to better align with the existing credit system,” Mr. Haddad said. The original decree set a fixed IOF rate of 0.95% for reverse factoring, along with a daily rate of 0.0082%. The fixed rate will be eliminated, and the daily rate adjusted.
As for Brazil’s broader system of tax expenditures, Mr. Haddad said the plan is to reduce them by at least 10%, although the exact figure has yet to be finalized. According to reporting by Valor Econômico, essential items such as the basic food basket, Simples Nacional regime, and the Manaus Free Trade Zone will be spared.
“We agreed here on cutting tax expenditures by at least 10%. Everything will be subject to deliberation by Congress. The Executive’s initiative is based on input from both congressional presidents and leaders who participated in the meeting,” Mr. Haddad stated.
Mr. Motta emphasized that the specifics of how tax incentives will be trimmed remain under discussion. “In the coming days, we will primarily target exemptions found in infra-constitutional legislation. There’s a suggestion to cut by 10%, but we might implement this gradually. The final structure is still up for debate,” the Chamber speaker said, adding that political feasibility will be a key consideration.
* By Jéssica Sant’Ana and Andrea Jubé — Brasília
Source: Valor International
https://valorinternational.globo.com/