Brazil's federal government plans to propose raising the annual revenue ceiling for Microempreendedor Individual (MEI) to R$130,000 [2].
This shift aims to modernize the MEI regime and respond to fiscal considerations and pressure from Congress. By increasing the limit, the government intends to allow micro-entrepreneurs to grow their businesses without losing their simplified tax status [5, 6].
Finance Minister Dario Durigan said the plan on Wednesday, June 17, 2024 [3]. The current annual revenue ceiling for MEIs stands at R$81,000 [1]. The proposed increase to R$130,000 [2] would be accompanied by a change in labor rules, allowing MEIs to hire one additional employee [3].
Durigan said the proposal could be presented to Congress in the coming week. The government does not intend to change other thresholds within the Simples Nacional tax system [3].
There are differing accounts regarding the timeline for the full implementation of the new ceiling. Some reports suggest the limit will be raised in 2026 [4]. Other reports indicate the increase may occur in two stages, only reaching the R$130,000 mark in 2028 [5].
The move is designed to enable the smallest business owners in Brazil to expand their operations and increase employment [5]. By raising the cap, the government hopes to prevent a "fiscal cliff" where entrepreneurs avoid growth to stay within the MEI tax bracket [6].
“The government plans to propose raising the annual revenue ceiling for Microempreendedor Individual (MEI) from R$81,000 to R$130,000.”
This proposal addresses a long-standing bottleneck for Brazil's smallest businesses, where the stagnant revenue cap forced entrepreneurs to either limit growth or transition to more complex and expensive tax regimes. By raising the ceiling and increasing the employee limit, the government is attempting to stimulate formal job creation and provide a smoother transition for micro-businesses scaling into small enterprises.
