The National Association of Tax Auditors of the Federal Revenue of Brazil (Unafisco Nacional) calculates that the exemption from Personal Income Tax (IRPF) for those earning up to R$5,000 will cost R$45 billion per year.
The exemption is among the measures announced by the Minister of Finance, Fernando Haddad, this Wednesday (27).
“The exemption for those earning up to R$5,000 is a fair measure, which should boost the economy and increase consumption. However, the fiscal impact estimated at R$45 billion per year requires robust solutions to offset revenues”, said the association’s president, Mauro Silva.
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Economists see Haddad’s measures as insufficient for fiscal adjustment
“The minister talks about taxing those who earn more than R$50,000, but it is essential to close loopholes such as pejotização and the lack of taxation on profits and dividends, which today allow many high income earners to escape the reach of the tax”, he added.
Cost cuts and IRPF exemption
This Wednesday (27), the Minister of Finance, Fernando Haddad, presented in a speech on national radio and television, which predicts savings of R$70 billion in the next two years: R$30 billion in 2025 and R$ 40 billion in 2026.
To balance the cuts considered unpopular, a benefit was announced: the expansion of Income Tax exemption for those earning up to R$5,000, a campaign promise from Lula.
This Thursday (28), mainly as a result of the announcement about the exemption, the price was 1.25% at R$ 5.99.
Shortly after the market opened, at 9 am, the dollar dropped slightly to R$ 5.97, with an increase of 1.03% compared to the close of Wednesday (27), when it reached R$ 5.91 – greatest value in history. The variation continued throughout the first half hour of trading, varying around R$5.96.
