Offshore taxation was removed from the text by agreement after pressure from Congress and will be resubmitted as a project; provisional measure goes to the Senate
The Chamber of Deputies approved this Wednesday (23.Aug.2022) the provisional measure that readjusted the minimum wage to BRL 1,320.00. The text also included an increase in the exemption from the Income Tax table for those earning up to BRL 2,640.00. The proposal was approved by 439 votes and had only 1 vote against and one abstention. It now goes to the Senate for analysis.
By agreement, it was removed from the text of the rapporteur, deputy Merlong Solano (PT-PI), the taxation of offshore. This taxation of financial investments abroad will be resubmitted by the government as a bill with constitutional urgency.
The agreement sewn with party leaders and the president of the Chamber, Arthur Lira (PP-AL), also included the edition of a new provisional measure to deal with the taxation of exclusive funds (onshores) that must finance the update of the IR table.
“We made a great effort to consolidate an agreement that would allow us to vote until today on the two MPs, the minimum wage and the Income Tax, merged into one. A report was also presented, which included the taxation of offshore companies. We agreed to remove that part. The União Brasil amendment was presented to remove this with our tender, with my endorsement and that of the Government”, said the leader of the Government in the Chamber, deputy José Guimaraes (PT-CE).
Merlong also contemplated in his report the permanent policy of valuing the minimum wage, which had initially been sent by the government as a bill, but was incorporated.
The update of the IR table and the taxation of offshores were foreseen in the MP 1,171 of 2023but were incorporated into the report on the measure on the readjustment of the minimum wage (MP 1,172 of 2023). The text expires on Monday (28.Aug), so it should be voted on by the Senate later this week.
“Once approved, we will have, once and for all, enshrined in law the policy of real increase in the minimum wage in a formula in which the minimum wage receives, each January, the inflation of the year calculated until November of the previous year plus the Domestic Product 2-year gross before minimum wage increase”, said Merlong Solano in plenary.
just the deputy Luiz Lima (PL-RJ) voted against. He claimed to have voted against by mistake. the deputy Alex Santana (Republicanos-BA) was the only one who abstained from the vote.
Minimum wage readjustment
The new calculation for the appreciation of the minimum wage will be based on 2 economic indicators: the inflation (change in prices compared to the previous year) and the GDP (variation of economic activity in the previous 2 years).
The federal government paid BRL 1,302 to those who receive the minimum pension in January, February, March and April. The benefit passed to BRL 1,320 From may.
In 2022, the value was R$ 1,212. It rose to R$1,302 on January 1st. This represents an annual increase of 7.4%. With the decision to increase the minimum to R$ 1,320, the readjustment became 8.9%.
The cost of raising the minimum wage to BRL 1,302 in 2023 would be BRL 36 billion. With an increase of R$ 18 in wages as of May, the estimated additional expenditure is R$ 40.8 billion for the Union.
The minimum wage impacts public spending because it represents the floor of social security benefits, such as retirement, pensions and aid.
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