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A bill introduced in Congress promises to stir the debate about the Brazilian tax burden. The proposal totally eliminates income tax, both for individuals and legal entities, and already generates intense discussions about fiscal impact, financial freedom, and the future of the tax model in the country.
During the debate on increasing the income tax exemption threshold, Deputy Júlia Zanatta (PL-SC) presented a bill that proposes to completely eliminate the collection of the tax in Brazil. The proposal covers both individuals and legal entities.
The text provides for the extinction of income tax in Brazil, both for individuals and legal entities. If approved, the country would stop collecting one of the main sources of federal revenue.
The proposal is seen as bold and controversial. In the Deputy’s view, the text could restore financial freedom to citizens.
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What The Bill Says
The Bill of Law No. 4329/2025 is straightforward. In Article 1, it declares the taxation on income in Brazil as extinct and prohibits the collection of any tax of this nature. This includes the Individual Income Tax (IRPF) and the Corporate Income Tax (IRPJ).
Article 2 repeals laws that regulate the collection, such as Law No. 7,713/1988 and Law No. 9,430/1996. Article 3 states that the measure will come into effect 180 days after publication.
According to Zanatta, the change is urgent. For her, income tax limits the individual’s right to fully enjoy the fruits of their own labor.
Historical Roots of The Tax
The justification text notes that the income tax originated in the United Kingdom in the 18th century. Its creation was a temporary measure to finance the expenses of the Napoleonic Wars.
Over time, the tax was maintained, taking on different functions within modern tax systems.
The project also mentions Karl Marx and Friedrich Engels. In 1848, in The Communist Manifesto, they advocated for a progressive tax as one of the necessary measures to implement communism in a country.
For the deputy, this history shows how the tax has consolidated as an instrument of state control over citizens.
In Brazil, income tax was first instituted in 1922, formalized by Law No. 4,625. Since then, it has become a central source of revenue for the government.
Criticisms of The Current Model
The deputy argues that income tax is a mechanism of exploitation. This is because the citizen not only gives up part of their income but is also required to declare everything in detail.
In case of error or omission, one is subject to heavy fines and even criminal sanctions.
Another point raised is the lack of return for society.
Brazil ranks 117th in the 2025 global economic freedom ranking.
In the international PISA assessment, which measures student performance, the country came in 44th out of 56 participants.
Moreover, although it is the 9th largest economy in the world in annual GDP, it does not appear among the countries with the highest GDP per capita or among those with the best Human Development Index (HDI).
The Relationship With Tax Reform
The text of the bill also criticizes the Tax Reform approved in 2024. The law created the Value Added Tax (VAT), which unified federal and state taxes.
The projected rate for Brazil is 28.55%, the highest in the world. This number surpasses Hungary, which currently leads the ranking with 27%.
For Zanatta, this shows that the path chosen by the country is to further increase the tax burden.
The end of income tax, according to her, would counterbalance this advance and open up space for a simpler and less invasive model.
Individual Freedom and The Laffer Curve
The project uses economic arguments to defend the abolition of the tax. The deputy mentions the Laffer Curve, a theory that shows the relationship between tax burden and revenue.
The reasoning is that there is a point of equilibrium. When taxes exceed this limit, they discourage production, encourage informality, and reduce the state’s own revenue.
Although the theory does not necessarily advocate for the abolition of taxes, it serves as a basis to argue that taxing income directly is harmful. This is because it punishes those who generate wealth and inhibits economic dynamism.
The justification emphasizes that, instead of penalizing merit and productivity, the state should allow wealth to circulate freely.
Revenue could be sustained by taxes linked to real economic activity and less invasive.
Possible Impacts and Political Debate
If approved, the proposal would have a profound impact on public accounts.
Income tax is responsible for a significant portion of federal revenue. Its extinction would require the creation of new revenue sources or a strong reduction in public spending.
Critics warn of risks of fiscal imbalance. Without income tax, social programs, investments in health and education, and even the functioning of the public administration would be compromised.
Até que enfim uma mente inteligente tentando fazer nosso país crescer com dignidade.
Meu Deus há um político com uma visão para quem paga imposto de renda nesse país,sou professora aposentada no meu holerite desconta todos os meses 2.600,00.com esse dinheiro eu teria uma qualidade de vida melhor para usufruir minha aposentadoria… obrigada deputada por essa sua preocupação..
O que mais chama atenção seria a obrigatoriedade do governo realizar forçadamente o enxugamento da máquina pública. Acabaria com os cabides de empregos!!!!