The Brazilian Chamber of Deputies is debating a proposal this month to raise the revenue ceiling for individual micro-entrepreneurs [1].
This move aims to modernize the Microempreendedor Individual (MEI) regime, which has struggled to keep pace with inflation. By adjusting the limits, the government seeks to support small business owners and encourage the formalization of employment for workers in the informal sector.
Hugo Motta (Republicanos-PB), the president of the Chamber of Deputies, said that the approval of the adjustment is imminent [1]. The proposal includes a new maximum revenue limit of R$145,000 [2]. Additionally, the legislation would allow MEIs to hire up to two employees, an increase from current restrictions [2].
To prevent the ceiling from becoming obsolete again, the project proposes an automatic annual adjustment linked to inflation [3]. This mechanism would ensure that the revenue limit evolves alongside economic shifts without requiring new legislation every few years [3].
Deputy Jorge Goetten, the relator of the bill, said he intends to present his report before the upcoming parliamentary recess [1]. While Motta has expressed support for the measure, the bill must still undergo the formal reporting process and a vote in the Chamber before it can be enacted [1].
The debate comes as micro-entrepreneurs face increasing pressure to scale their operations while remaining within the legal bounds of the simplified tax regime. The current ceiling has long been criticized by business advocates as a barrier to growth—forcing entrepreneurs to either stagnate or move into more complex and costly tax categories prematurely [3].
“The proposal includes a new maximum revenue limit of R$145,000.”
If passed, this legislation represents a significant shift in Brazil's approach to small business sustainability. By indexing the revenue ceiling to inflation and expanding hiring capacity, the state is attempting to reduce the 'growth trap' where micro-entrepreneurs avoid expanding their business to avoid higher tax burdens. This could lead to a surge in formal job creation and a more resilient base of legalized micro-enterprises.
