A study that estimated the fiscal impact of the changes was not validated by the Ministry of Economy
Minister Paulo Guedes (Economy) denied that there are studies in the government to end deductions for medical and education expenses in the IRPF (Individual Income Tax). Here’s the intact of the press release (13 KB).
The minister’s statement responds to a newspaper report The state of Sao Paulo who had access to a supposed study to estimate the impacts with the end of tax deductions. The newspaper said the report was made without Paulo Guedes’ endorsement. O Ministry of Economy said he did not recognize the validity of the document.
In 2019, the minister has already defended changes in the IRPF deductions. He went on to say that there is “too much deduction”. But, in the note, he stated that he refutes “strongly” the allegation that it intends to end discounts on medical and education expenses. “Any inference in this regard is totally unfounded”declared.
According to the report, the end of deductions with health and education would have an impact of R$ 30 billion for the cash of the National treasure and could be used for the president’s promises Jair Bolsonaro (PL) to definitively increase Auxílio Brasil to R$ 600. The benefit in this amount is valid until the end of the year.
The document that Estadão had access to has, according to the newspaper, 10 pages and annexes with suggestions for legislative changes. It would have been prepared after the 1st round of the 2022 elections.
The document said that the government would save BRL 24.5 billion by ending the deduction for medical expenses and BRL 5.5 billion with spending on education. Currently, the law does not establish a ceiling for medical expenses deductions from the IRPF. The limit for the education deduction is BRL 3,561.50 per dependent.
Guedes said that the official position of the Ministry of Economy is given by the minister. He stated that, despite not recognizing the validity of the document, the Ministry carries out tests, studies, proposals, scenarios, analyzes and other works under the most different views on the part of the technicians.
“This type of activity does not represent, in advance, the opinion, position or decision of the Ministry and the minister”declared.
He also stated that another study analyzing the end of medical deductions and with education had been carried out and had already been rejected by the government. “At the time, the proposal that was most supported by Minister Paulo Guedes was the increase in the exemption of the Individual Income Tax bands”said the note from the Ministry of Economy.
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