Brazilian Supreme Federal Court Justice Alexandre de Moraes reinstated nearly all of President Luiz Inácio Lula da Silva’s decree that raises the Imposto sobre Operações Financeiras (IOF), overturning a congressional resolution that had suspended the measure. The monocratic ruling, issued on 16 July, upholds the government’s authority to adjust IOF rates by decree, while striking down the new levy on so-called “risco sacado” receivables-financing operations, which the court said exceeded the Executive’s legal remit. With the decision, higher IOF charges resume on a wide range of transactions, including international credit-card purchases, foreign-exchange operations, short-term loans and high-value VGBL insurance policies. Key rates rise to 3.5% on card spending abroad and cash currency purchases, and the daily IOF on corporate credit doubles to 0.0082%, among other changes. The contested ‘risco sacado’ item remains exempt. Moraes made the ruling retroactive to 11 June, the date the decree took effect, exposing banks, companies and individuals to back taxes on deals closed during the suspension period. Market analysts warn the retroactivity creates legal uncertainty and potential liabilities that could complicate investment planning. The Finance Ministry projects the decree could generate about R$12 billion in additional revenue next year and more than R$31 billion in 2026; scrapping the ‘risco sacado’ portion trims roughly R$450 million and R$3.5 billion from those totals, respectively. The decision triggered sharp criticism in Congress, where senators and opposition deputies accused the court of encroaching on legislative powers and vowed to seek a political response. The order will be reviewed by the full STF after the judiciary’s recess in August, leaving the final word on the tax changes—and their retroactive reach—pending a collective vote.