Planalto and Fazenda are assessing how to implement the measure in 2023; Income Tax table is outdated since 2015
The president Luiz Inacio Lula da Silva (PT) considers increasing the IRPF (Individual Income Tax) exemption range for those who receive up to 2 minimum wages still in 2023. With that, the ceiling would increase from R$ 1,903 to R$ 2,604.
The matter has been frequently debated between the Ministry of Finance and the Planalto Palace, as the Power360. The two teams are discussing a solution to compensate for any loss of revenue above R$10 billion.
This involves raising taxes for the richest. The increase in taxes, however, could only take effect in 2024 because the IR is subject to the principle of annuality.
There is a deficit of BRL 231.5 billion in the 2023 Budget, which is equivalent to 2% of GDP (Gross Domestic Product).
The Ministry of Finance also carried out a study on the correction of the Income Tax, whose table has been out of date since 2015. In line with the subject, is Lula’s campaign promise to raise the IR exemption range to R$5,000.
On Wednesday (Feb 1st), in an interview with Power360the Minister of Planning and Budget, Simone Tebetsaid that this proposal would come into effect until the end of Lula’s term. “The president did not say that he will do this in just one year. 4 years into officehe declared.
Tebet reinforced the PT’s intention to increase the income tax exemption range: “For the next few months, the president wants to increase the exemption range from R$ 1,903 for those who earn up to 2 minimum wages”.
On Thursday (Feb 2), Lula addressed the issue with the finance ministers, Fernando Haddadfrom the Civil House, Rui Costaand Labor and Employment, Luiz Marinho. A new real increase in the minimum wage was also under discussion.
The tendency is for a new value to be presented on May 1st, when Labor Day is celebrated. On January 12th, the government signed the creation of a working group to discuss raising the minimum wage.
This WG is in charge of building a proposal within 45 days. Until then, the formula for adjusting the minimum wage in the coming years should be presented. The growth of the economy (GDP) plus inflation should be considered.
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