The Brazilian Chamber of Deputies passed legislation early Wednesday that maintains the Redata (Special Taxation Regime for Data Center Services), which eliminates PIS/Pasep, Cofins, and IPI (Tax on Industrialized Products) for equipment used in establishing, maintaining, or expanding data centers in Brazil. The decision was made through a symbolic vote, meaning individual votes were not declared. Supporters in the sector and lawmakers expect the bill to be voted on in the Senate the same day, which is also the deadline for presidential sanctioning.

The approved bill fully replaces a provisional measure initiated by the federal government in November of the previous year, aimed at creating a package of tax benefits that would last until 2026. Since the commission for the provisional measure was never established, the government leader, Deputy José Guimarães (PT-CE), introduced the new bill maintaining the same benefits. The legislative action reflects a concentrated effort to boost the data center industry, crucial for digital infrastructure.

This move underscores the Brazilian government's commitment to enhancing the country's digital economy by fostering growth in the data center sector, which is critical for handling the increasing demand for online services and data processing. With these incentives, Brazil aims to attract more investments into this vital area, streamline operations, and potentially position itself as a competitive player in the broader digital landscape.