Expert says lower interest rates would best support Brazil’s MEIs

Brazil’s government announced five measures for individual microentrepreneurs, known as MEIs, including tax-debt forgiveness and simpler invoicing rules.

MEIs are small businesses whose annual revenue limit has remained at 81,000 reais since 2018, while inflation has reduced its value by more than a third.

Investment specialist Gustavo Trotta said forgiving debts after offering discounts on them in July could make people who already paid feel unfairly treated and encourage others to wait for future relief.

He estimated the package could have an impact of about 26 billion reais by 2030, but said lower interest rates would better support MEIs.

Trotta said keeping public finances in balance matters because government spending can affect future interest rates, and high rates weigh heavily on small businesses.

He welcomed dropping invoice requirements for nanoentrepreneurs earning up to 40,000 reais a year, but said a proposed transfer of up to 5,000 reais through PIX needs clear rules and oversight.

The PIX transfer proposal still needs to go to Congress, and the measures’ real effects will become clearer as they are approved and put into practice.