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Unanimous Decision by the Chamber of Deputies Guarantees Income Tax Exemption Up to R$ 5 Thousand, Benefiting Millions of Workers, While High-Income Taxpayers Will Face Increased Minimum Rates to Compensate for Revenue Loss
The Chamber of Deputies has unanimously approved the bill that guarantees income tax exemption up to R$ 5 thousand per month. The measure, sent by the government and reported by former Chamber President Arthur Lira, represents one of the largest adjustments to the income tax table in two decades and is expected to directly benefit around 10 million Brazilians.
To balance the accounts, the approved text provides that high-income earners will be taxed more: taxpayers with annual earnings above R$ 600 thousand will start paying a minimum rate of 10%. The proposal still needs to pass through the Senate, but it is already seen as a significant political victory for the government and a historic milestone for the middle class.
What Changes for Those Earning Up to R$ 5 Thousand
Currently, only incomes up to R$ 3,036 were exempt. With the change, workers earning up to R$ 5 thousand per month will not pay income tax.
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The impact is immediate: millions of Brazilians will no longer have deductions from their salary or retirement, increasing disposable income for consumption and easing the household budget.
Experts emphasize that this advancement corrects a backlog accumulated in the income tax table, which for years pressured the middle-class income bracket.
With the adjustment, the tax burden becomes more progressive, bringing Brazil closer to standards adopted in other countries.
Bracket Between R$ 5 Thousand and R$ 7,350 Will Also Benefit
Those earning between R$ 5 thousand and R$ 7,350 will have a special table with progressive rates and automatic deductions, which prevents those earning just above the exemption limit from paying more tax than they should.
In practice, this bracket will see a reduction in the tax burden compared to the current scenario, although it will not be completely exempt.
This adjustment meets a recurring demand from workers who felt penalized for slightly exceeding the exemption limit, creating greater tax fairness within the middle class.
The Impact for High Income
To compensate for the revenue loss, the government concentrated the tax burden on the wealthiest.
Taxpayers with earnings above R$ 50 thousand per month, or about R$ 600 thousand per year, will face a minimum rate of 10%, regardless of how they organize their earnings.
This particularly affects self-employed professionals and business owners who use companies to receive profits and dividends that are currently exempt.
According to data presented during the process, only 0.2% of the population will be affected by the minimum tax, corresponding to just over 200,000 people.
This group, however, concentrates a significant portion of national income, making the measure a method of fiscal redistribution.
The Political Weight of the Decision
The vote was symbolic: all 493 recorded votes were in favor, including those from opposition parliamentarians.
The unanimity reinforces the popular appeal of the measure and the political skill required to approve the bill urgently.
Reporter Arthur Lira made only minor adjustments to the original text sent by the Ministry of Finance.
The approval is also viewed as a personal victory for President Lula, who promised during the campaign to expand the exemption range.
For the government’s base, the topic combines economic relief for the middle class with fairer taxation for the wealthy, strengthening the discourse of social justice.
What Still Needs to Happen to Take Effect
The project is now headed for Senate review. If approved without changes, it will be sent for presidential sanction.
If amendments are made, it will return to the Chamber for a new vote.
The government is working to ensure approval in 2025, so that the new rules can be applied in the 2026 income tax declaration.
The approval of the income tax exemption up to R$ 5 thousand represents a historic turning point in the country’s tax policy.
Millions will see immediate relief in their pockets, while high-income earners will contribute more. The debate now shifts to the effects on revenue, consumption, and the economy as a whole.
And you, do you believe that the measure will bring more tax fairness, or are you concerned that the compensation on the wealthy will end up discouraging investments? Leave your opinion in the comments and share how this change directly impacts your life or your sector.
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