Hugo Motta, president of the Chamber of Deputies (Republicanos-PB), signaled the likely approval of a proposal to raise the revenue ceiling for individual micro-entrepreneurs.
This legislative shift aims to provide greater financial flexibility for Brazil's smallest businesses, allowing them to grow without immediately losing their simplified tax status. By expanding the limits of the Microempreendedor Individual (MEI) category, the government seeks to broaden support for solo entrepreneurs and small-scale service providers.
The proposal, which Motta said was sent to President Lula, suggests increasing the annual revenue limit for MEIs to R$ 130,000 [1]. This adjustment is intended to reflect current economic realities and inflation, ensuring that small business owners are not penalized for increasing their earnings.
Beyond the revenue cap, the proposal introduces changes to labor hiring rules for these entrepreneurs. Under the new terms, a MEI would be permitted to hire up to two employees [2]. These workers must be paid either the national minimum wage, or the specific floor wage established for their professional category [2].
During an interview with CNN Brasil in Brasília on Tuesday, May 26, 2024, Motta said he supports the measure. He indicated that the Chamber of Deputies is positioned to move the project forward, signaling a legislative path toward approval.
The current MEI framework has long been a subject of debate among Brazilian policymakers. Critics often argue that the existing limits are too restrictive, forcing entrepreneurs to transition into more complex and costly tax regimes prematurely. The proposed increase to R$ 130,000 [1] serves as a buffer for those scaling their operations.
By allowing the hiring of two employees instead of one [2], the government is attempting to stimulate local job creation. This change acknowledges that many micro-businesses reach a point where a single assistant is insufficient to maintain growth, yet they cannot afford the administrative burdens of a larger corporate structure.
“The proposal suggests increasing the annual revenue limit for MEIs to R$ 130,000.”
This proposal represents a strategic effort to formalize more of Brazil's informal economy by making the MEI status more sustainable for growing businesses. By raising the revenue ceiling and doubling the allowed headcount, the government is reducing the 'growth trap' where entrepreneurs avoid expanding their revenue to avoid higher taxes and regulatory hurdles.
