The Minister of Economy, Paulo Guedes, denied today (25) that the government intends to end the deductions of expenses with health and education from the income tax. At an event organized by the Organization of Cooperatives in Brazil (OCB), he said that the government does not intend to make packages that affect business people and the middle class.
According to the minister, the idea was studied during the tax reform discussions, but was discarded. He stated that the government is studying correcting the income tax (IR) table and increasing exemptions for the lower classes.
According to a study published today by the newspaper O Estado de S. Paulo, the economic team defended in writing the end of the deduction of health and education expenses in the income tax return. The measure, according to the ministry, would generate savings of R$ 30 billion per year.
The minister again denies that he intends to change the rules so that the minimum wage and retirement are adjusted below inflation. He said that workers, retirees and pensioners had inflation restored, even during the pandemic. “Once the pandemic is over and over, increases in salaries and benefits can even be above inflation”, declared the minister.
Guedes denied the intention to announce packages that affect business and the middle class. According to him, all economic measures are discussed in advance and in dialogue with society. “We’re not going to scare anyone, there’s no Guedes package. Everything we are going to do we have announced before,” he said.
The minister stated that Brazil should grow between 3% and 4% over the next ten years. He, however, demanded the approval of the tax reform passed by the House last year and which is stalled in the Senate. According to the version approved by the deputies, the proposal institutes the taxation of dividends (part of the profit distributed to shareholders), but has a negative tax impact by reducing taxation on corporate profits.
In relation to cooperatives, Guedes declared that the generation of a market economy with a strong middle class passes through the expansion of cooperativism. He advocated maintaining special tax regimes for cooperatives, with a transition to Value Added Tax (VAT).
