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Brazilian government plans to increase income tax exemption in 2023

By Marcela Ayres

BRASILIA (Reuters) – Newly elected Brazilian President Luiz Inacio Lula da Silva is considering an income tax exemption for workers who earn two times the minimum wage, or just over 2 ,600 Real ($320).64) From January, 2015 present, two sources with knowledge of the negotiations said on Saturday.

The idea, still under review, is to at least partially fulfill one of Lula’s campaign promises – to further increase the exemption to cover income equivalent to 5, workers in the real, the source said on condition of anonymity that the measure would increase disposable income for the lower earners in the country. .

While it could reduce income inequality, a broader waiver would signal a stronger primary deficit as the economic team seeks to reduce2015 expected Reduce tax fiscal discipline.

As Reuters reported on Friday, the government is also considering raising the minimum wage to 1 from May, 64 Rea you.

This means that the exemption, if decided, will apply to workers whose monthly income does not exceed 2,600 reais.

The current salary reaches 1, 600. 64 no payment for one month Income tax, a figure that has not been updated since 2015, which means that in practice the tax burden for low-wage Brazilians has increased.

($1=5.2015 real)



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