Lula sends an exemption from $ 5,000 to the congress: understand what can change and impacts of the proposal

Lula sends an exemption from $ 5,000 to the congress: understand what can change and impacts of the proposal


The government’s expectation is that the project will be approved at congress in time so that the exemption is valid in 2026. Economists warn that the measure could have an impact on inflation and interest.




The federal government sends this Tuesday (18/3) to the national congress proposed to exempt from income tax (IR) which earns up to $ 5,000 per month.

The proposal is a promise of the campaign of President Luiz Inacio Lula da Silva (PT).

It had been announced by Finance Minister Fernando Haddad at the end of last year with the tax package which included measures such as the modification of the re -implementation rule of the minimum wage.

The government’s expectation is that the project will be approved by the end of the year, in time that the exemption is valid in 2026.

“The truth is that those who pay to go to this country are the one who has a discount at the source, because there is no way to escape. He is obvious on his payroll. But that sometimes he earns much he does not pay. He always invents a” Mutrete “cannot pay.

According to the proposal, the change in the IR will have no tax impact, since the idea is that the increase in taxation on the richest compensation on the loss of revenue with the exemption of exemption.

The government proposes a minimum tax for those who earn more than $ 50,000 per month, through a CPF or CNPJ. Previously, Haddad had declared that this rate could reach up to 10% of the income.

Monday (17), Haddad said that the loss of revenue with the measure is estimated by about $ 27 billion to 2026.

Initially, the loss of revenue had been estimated at 32 billion R $, but the amount was followed.

“It was a recalculation, because this year there will be a slight correction after the budget, due to the increase in the minimum wage,” said the minister.

The measure is seen as part of Lula’s “package” in the middle of the fall of the popularity of its management on the eve of the presidential elections, scheduled for October of next year.

In addition to the EREment of IR for an income of up to $ 5,000, the government has also started a ministerial reform and has announced measures such as wages for formal workers and the release of the withdrawal from the FGTS (FGT) guarantee fund for those who joined an annual retreat.

A survey conducted from Quatest to December showed that 75% of interviewees approved the exemption of IR to those who receive up to $ 5,000. At the end of last year, the measure was highly approved by the voters of Lula and the supporters of the former president Jair Bolsonaro (PL).

The defenders of the proposal say that the income tax table has been obsolete from inflation for years, which leads taxpayers to pay more taxes.

The critics, on the other hand, consider the “electoral” proposal and argue that the measure benefits the middle class and increases the concentration of income and does not contribute to the effort to balance the government’s government.

Economists also warn that the injection of resources in the economy generated by a lower tax payment can have an impact on inflation and interest rate.

Understand what can change if the proposal is approved by the congress and possible impacts of the measure.

For those who earn up to $ 5,000: exemption

In the law, the current exemption limit is $ 2,259, but with the “simplified discount” mechanism adopted by the Lula government since 2023, in practice, the exemption benefits from those who earn up to two minimum wages (R $ 2,824).

There were 40.6 million declarants in the annual adaptation IR, according to the 2022 data. Of these, about 16 million were exempt from the current rule (39% of the total).

With the proposal, another 16 million people should also be free, according to the calculation of MCM consultants, which would entail 32 million free – or 79% of the total, an unprecedented level.

Those who earn up to $ 7,500 will also pay for less income taxes, according to the proposal sent on Tuesday to the congress.

The super rich group, those who receive more than $ 50,000 per month pay more income taxes, with a minimum rate of 10%, to be charged on all sources of income.

The idea of ​​the government is that the debate to the congress on salary exemption up to $ 5,000 is completed this year – and, if approved, the measure is valid on January 1, 2026.



Those who receive more than $ 50,000 per month should pay more IR, according to the proposal to the congress

Possible impacts

The federal government estimated the loss of revenue with the exemption of IR for $ 27 billion income in 2026.

In practice, what people will not pay in taxes should mean an additional injection of resources in the economy, with effect on family consumption, on gross growth of the internal product (GDP), on inflation and on the rate of interest, the MCM Consultatorers economists have observed in a study published last week.

According to the MCM team, since the Brazilian economy is already currently overheated, the shock expected in family consumption can derive from the fact that the central bank has no room to reduce the basic interest rate by 2026 or may have to adapt a little rate, to combat the effects of the injection of resources in the economy on inflation.

This is because, with more money in your pocket, families go shopping, pressing on request and prices of the products.

The studies conducted by the Macroeconomic Research Center for the inequalities of the University of São Paulo (Made-OSP) before the government’s proposal was sent to the Congress showed that the exemption of IR up to 5,000 R $ 5,000 already privileged benefits of the company.

According to the researchers, the measure must actually be combined with greater taxation of the top so that there is no worsening of the country’s inequality.

“Currently, we have about 22% of the population who pays for income tax and with the modification of the rule will have only 8%,” said Luiza Nassif Pires, director of the USP and professor at the Unicamp Institute of Economics, in an interview with the BBC News Brazil in December.

“So, there is a problem that, despite the feeling that increasing the exemption up to $ 5,000 is something that would distribute income to the base, in fact, this is a distribution of income to a middle class already at the top of the pyramid,” added the researcher.

Also in an interview with the BBC, Samuel Pessôa, researcher at the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre-Fgv) and the head of economic research at the Julius Baer family member, criticized the fact that the change in the IR was announced with the government’s tax package.

“The minister [Haddad] He said he aims to make a great reformulation of income taxes, in order to reduce the degree of regression and perhaps make Brazilian income taxes more progressive. The minister is absolutely correct. Now this would require a wider revision of all income taxes. This is not what has been done, “said Pessôa, in conversation with the BBC in November.

“What has been done is a measure that, in my opinion, is electoral so that the president can get a part of the population, whose majority would not vote with him, to vote with him in 2026”, added the economist.

For Pessôa, it will be essential to follow the processing of the project at the congress.

“The great fear that remains is the congress to approve the exemption, the increase in the income tax table and not to approve the tax on the rich. So creates a tax imbalance, aggravates the problem,” the economist observed.

Source: Terra

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