Workers Earning R$ 5,000 Will Be the Biggest Beneficiaries of the New Income Tax Rule

Written by Fabio Lucas Carvalho

Published on 06/09/2025 at 17:43

Foto: Reprodução

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Changes In Income Tax Foresee Exemption Up To R$ 5 Thousand And Partial Discounts Up To R$ 7,35 Thousand, Impacting Millions Of Taxpayers As Of 2026.

The proposed amendment to the Income Tax under review in Congress promises a direct impact on workers’ wallets. The biggest beneficiaries will be those with a formal contract and a monthly salary of R$ 5 thousand, according to calculations presented by specialists.

Direct Gains In Salary

Those earning R$ 5 thousand a month will see a significant reduction in the withholding tax. The discount would reach around R$ 313 monthly.

In a year, considering the thirteenth salary, the accumulated savings would be R$ 4,067.

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Comparison By Salary Range

The proposal creates a earnings scale. See the simulation:

Those earning R$ 3,400 would have R$ 27.30 more per month, totaling R$ 354.89 for the year.
For salaries of R$ 4,000, the monthly gain would be R$ 114.76, with an annual impact of R$ 1,491.89.
The largest benefit appears in the range of R$ 5 thousand, with an increase of R$ 312.89 per month, accumulating R$ 4,067.57 by the end of the year.
Those earning R$ 5,500 would gain R$ 246.32 monthly and R$ 3,202.19 annually.
Starting from R$ 7,350, there is no benefit at all.

Therefore, the gains gradually decrease until they reach zero above the established range.

How The Rule Would Work

According to the proposal, there will be a variable discount that guarantees Income Tax exemption for incomes of up to R$ 5 thousand. Above this amount, the discount becomes decreasing until reaching R$ 7 thousand, according to the original idea of the government.

The report from Deputy Arthur Lira (PP-AL), however, extends this range to R$ 7,350.

Lira stated that the change could benefit 500,000 Brazilians and that the measure aims to ensure “neutrality” in the project. To take effect in 2026, the text must be approved by the Legislative.

Number Of Benefited Taxpayers

If approved, the project would exempt about 10 million taxpayers as early as 2026. The Ministry of Finance’s calculation indicates that 26 million people, equivalent to 65% of income tax filers, would not need to pay the tax. Considering the total population of the country, 87% would be exempt from paying IRPF.

Government Objective

The federal government announced in March that it intended to raise the exemption threshold from R$ 3,036, equivalent to two minimum wages, to R$ 5 thousand as of 2026. Furthermore, the proposal provides for partial exemption for salaries between R$ 5 thousand and R$ 7 thousand.

To compensate for the loss of revenue, the economic team proposed increasing taxation on the super-rich. This would affect those with a monthly income above R$ 50 thousand, which amounts to R$ 600 thousand annually. The tax on dividends cannot exceed 34% for companies and 45% for financial institutions.

Haddad Statements

During a presentation in Congress, Finance Minister Fernando Haddad highlighted the social impact of the measure. “From the perspective of income taxation, unfortunately, we have a very dramatic picture. Because I often say that the resident of the penthouse does not pay condominium fees, and the doorman is paying the condominium fees of the same building. This is the truth about Brazil, it is the reality of Brazil,” he stated.

Criticisms From Specialists

Despite the government’s defense, analyses indicate that the measure benefits the middle class more. Data from PNAD, collected by LCA Consultores, shows that only 32% of Brazilian workers, those with salaries above two minimum wages, will see gains. In other words, the majority of workers are already exempt under current rules.

In practice, the government would increase taxation on the richest 1% to transfer income to a group also located at the top of the pyramid.

Workers Earning R$ 5,000 Will Be the Biggest Beneficiaries of the New Income Tax Rule

Changes In Income Tax Foresee Exemption Up To R$ 5 Thousand And Partial Discounts Up To R$ 7,35 Thousand, Impacting Millions Of Taxpayers As Of 2026.

Direct Gains In Salary

Comparison By Salary Range

How The Rule Would Work

Number Of Benefited Taxpayers

Government Objective

Haddad Statements

Criticisms From Specialists

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Workers Earning R$ 5,000 Will Be the Biggest Beneficiaries of the New Income Tax Rule

Changes In Income Tax Foresee Exemption Up To R$ 5 Thousand And Partial Discounts Up To R$ 7,35 Thousand, Impacting Millions Of Taxpayers As Of 2026.

Direct Gains In Salary

Comparison By Salary Range

How The Rule Would Work

Number Of Benefited Taxpayers

Government Objective

Haddad Statements

Criticisms From Specialists

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Gaddafi built the world’s largest artificial river under the Sahara — it’s 4,000 km of giant pipes that pump 40,000-year-old fossil water to entire cities in Libya.

Discovery in Africa scares even scientists: a study published on April 23 reveals that the crust in Turkana has become so thin that it could pave the way for the continent’s division and the emergence of an ocean in the future, in a gigantic geological transformation.

A German architect built a cylindrical house in 1994 that rotates to follow the sun throughout the day, generates 5 times more energy than it consumes, and was the world’s first energy-positive house.

A company that drilled for oil has drilled 4.8 kilometers of rock in Utah and found a never-ending heat of 290 degrees — now it is building the world’s first next-generation commercial geothermal power plant, with 100 MW connected to the grid in June 2026.

Brazil spent R$ 1.9 billion on a giant bridge to Paraguay, and it is already finished, but no one can use it properly because the access points are not ready, and traffic remains blocked months later.

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