THE approval by the National Congress The increase in the Personal Income Tax (IRPF) exemption range for those earning up to R$5,000 per month represents a milestone in the history of Brazil, said this Wednesday (5) the Minister of Finance, Fernando Haddad. Approved unanimously by the Senate, the proposal goes to President Luiz Inácio Lula da Silva for approval.
“A very important day for Brazil. I would like to thank the president [do Senado] Davi Alcolumbre and senator Renan Calheiros [relator do texto na Casa]. It was a very important day for the country to look at inequality,” said Haddad.
Earlier, Alcolumbre stated that the project was sent for sanction with the guarantee that the benefit will come into force in January 2026. One of President Lula’s main campaign promises, the expansion of the exemption range, with the increase in income tax for the richest 0.1% of the population, was one of the economic team’s priorities for this year.
Haddad highlighted the social nature of the measure.
“In my opinion, it will be a milestone in the history of Brazil. The Ministry of Finance is looking at all dimensions of the economy: inflation, growth, employment. But it is also looking at [o combate à] inequality. It’s an agenda that needed to be on society’s radar once and for all”, declared the minister.
Haddad highlighted that the increase in exemption will especially benefit lower-income families and will have a positive impact on consumption and economic activity.
New tax rate on super-rich
The minister highlighted that the project is neutral from a fiscal point of view, since the revenue waiver will be compensated by the creation of a minimum Income Tax of 10% on annual income above R$1.2 million.
“It is a neutral tax from a fiscal point of view. The savings that families will make will reduce debt, reduce defaults and increase the purchasing power of salaries”, explained Haddad.
According to him, the measure “will make the economy move forward” and will allow businesspeople to plan greater production, based on a more robust consumer market.
Sanction
Earlier, the Minister of the Secretariat of Institutional Relations, Gleisi Hoffmann, stated in the Senate that President Lula should sanction the law after COP30, which takes place in Belém.
With the presidential sanction, the expansion of the Income Tax exemption range becomes part of the set of economic measures aimed at reducing inequality and stimulating domestic consumption.
