13.7 Million Brazilians Will Stop Paying Income Tax (IR) With New Rules Starting May 1st, Labor Day

Written by Roberta Souza

Published on 22/02/2023 at 17:31

Updated on 22/02/2023 at 18:43

Foto: Reprodução pinterest

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This Measure Will Help People With An Income Below, As Those Earning Up To Two Minimum Wages Will Not Have To Pay The Tax

Starting from May 1st (Labor Day), according to the Federal Revenue, about 13.7 million individual taxpayers will stop paying Income Tax due to the new table correction rules, meaning that individuals earning up to two minimum wages (R$ 2,640) will be exempt from the tax, according to the Broadcast website.

The percentage of people who will be exempt from paying income tax corresponds to about 40% of the total 32 million Income Tax returns received last year by the Federal Revenue.

The team of Finance Minister Fernando Haddad designed a model that reduces the impact of the measure on public accounts with the goal of meeting President Lula’s directive.

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Loss Or Salvation?

With this new income tax measure, the revenue loss will be R$ 3.2 billion in 2023, from May to December, and R$ 6 billion in 2024, according to data from the Federal Revenue. These figures contrast with forecasts from the National Union of Revenue Auditors, which projects a revenue decrease of R$ 14 billion this year.

At the beginning of the year, Minister Haddad stated that there would be no correction to the income tax table in 2023, expressing his desire for the changes to occur only in 2024.

However, faced with political pressure due to the negative reaction from income taxpayers, the elected president decided to start the change to the IR table this year.

New Income Tax Table Will Favor People With Lower Incomes

According to data from the Federal Revenue, the simplified deduction of R$ 528 will ensure that individuals earning up to R$ 2,640.00 monthly remain exempt from paying income tax.

In a statement, the agency says: “This operationalization serves to ensure that Brazilians feel the benefits immediately in their pockets”.

There will be no withholding at source for this income range, so individuals earning up to this range will have to wait for the declaration in the following year to request the refund of what was withheld.

13.7 Million Brazilians Will Stop Paying Income Tax (IR) With New Rules Starting May 1st, Labor Day

This Measure Will Help People With An Income Below, As Those Earning Up To Two Minimum Wages Will Not Have To Pay The Tax

Loss Or Salvation?

New Income Tax Table Will Favor People With Lower Incomes

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13.7 Million Brazilians Will Stop Paying Income Tax (IR) With New Rules Starting May 1st, Labor Day

This Measure Will Help People With An Income Below, As Those Earning Up To Two Minimum Wages Will Not Have To Pay The Tax

Loss Or Salvation?

New Income Tax Table Will Favor People With Lower Incomes

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