US EditionBrazil’s lower house approves an increase in tax exemptions for low-income people
- Brazil's lower house approved increasing the income tax exemption to 5,000 reais per month, fulfilling a key 2022 electoral promise by President Lula.
- The bill, introduced in March by Lula's leftist government to offset revenue loss, includes a minimum effective tax on individuals earning over 600,000 reais annually.
- The exemption would more than double the previous threshold and the tax on high earners would scale up to 10% for incomes exceeding 1,200,000 reais, targeting about 141,000 wealthy individuals.
- Economist Carla Beni said the exemption corrects tax imbalances where many rich pay less proportionally and predicted people will spend more, save, or pay debts, while Speaker Motta called the exemption a right and a social justice step.
- If the Senate approves, Lula will sign the reform into law for implementation on January 1, 2026, with the measure expected to benefit 15 million workers and reinforce Lula's political support ahead of his re-election bid.
20 Articles
20 Articles
Brazilian MPs have validated President Lula's flagship measure to exempt middle income tax classes, which will be financed by an increase in the tax rate of the richest, which will be multiplied by four.
At the expense of the rich.
Associated Press News
Brazil’s lower house approves an increase in tax exemptions for low-income people
Brazil’s lower house has approved exempting up to 5,000 reais ($940) a month from income taxes. That would more than double the current exemption and meet a key priority of President Luiz Inácio Lula da Silva’s 2022 election campaign.
The lowering of taxes on the middle class — Brazil’s wage earners who charge around $900 a month — achieved a kind of miracle in these times of extreme political polarization in Latin America’s first economy. And it gave President Luiz Inácio Lula da Silva an important, albeit partial, triumph that boosts his main electoral promise for this third term. The Chamber of Deputies unanimously approved, on Wednesday night, to exempt from income tax th…
The initiative states that starting in 2026, workers who charge about $940 per month will not have to pay the income tax.
The political scientist and CEO of Qaest, Felipe Nunes, assessed that the approval of the exemption from the Rent Tax for returns up to R$ 5 thousand represents a relevant victory for the government, both from a political and economic point of view. According to him, the measure “de discourse” and, at the same time, generate a concrete effect, since a significant portion of the elector will come to feel the benefits directly in the bag. Unique m…
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