A decree signed by President Luiz Inácio Lula da Silva in late May raised the Imposto sobre Operações Financeiras (IOF), a move the Finance Ministry said could add about R$ 20 billion to 2025 revenues. On 25 June, Congress overturned the measure by 383 votes to 93 in the Chamber and a swift confirmation in the Senate, marking the first revocation of a presidential decreto in more than three decades. Both the government and its critics took the dispute to the Supreme Federal Court. The PL asked the Court to strike down the tax increase, while PSOL sought to nullify Congress’s revocation. On 1 July the Advocacia-Geral da União, with Lula’s endorsement, filed an Ação Declaratória de Constitucionalidade to restore the higher rate. Because the three cases overlapped, Chief Justice Luís Roberto Barroso assigned them to Justice Alexandre de Moraes. In a precautionary ruling on 4 July, Moraes suspended all the contested acts—both the presidential decree that lifted the IOF rates and the legislative decree that cancelled the hike—leaving the tax at its pre-May level. He ordered the Executive and the Legislature to present detailed justifications for their positions within five days and scheduled a conciliation hearing for 15 July, citing the need to preserve the constitutional ‘independence and harmony’ of the branches of government. House Speaker Hugo Motta hailed the decision for ‘avoiding a tax increase,’ while Finance Minister Fernando Haddad said the Court’s intervention could clarify the fiscal powers of each branch. The limbo keeps roughly R$ 20 billion in projected revenue off the government’s books and puts added pressure on the July talks, where the Planalto and Congress must seek a compromise before the full Court revisits the case.