Minister of Finance spoke for 7 minutes and 18 seconds on national television and said that the country will save R$70 billion in 2 years (2025 and 2026)
The Minister of Finance, Fernando Haddadconfirmed this Wednesday (November 27, 2024) that the president’s government Luiz Inácio Lula da Silva (PT) It will exempt anyone who earns up to R$5,000 per month from IRPF (Individual Income Tax). To offset the tax impact, the government intends to increase taxes on those earning more than R$50,000.
The minister made a speech on national radio and television lasting 7 minutes and 18 seconds in which he announced the main points of the spending review package and fiscal measures that will be implemented with the aim of reaching the government’s coffers in 2025 and 2026.
“We reaffirm our commitment to Brazilian families: protecting the employment, increase purchasing power and ensure sustainable economic growth. Exactly for this reason, today we also announce the biggest income reform in our history. Honoring the commitments made by President Lula, with the approval of the income reform, an important part of the middle class, which earns up to R$5,000 per month, will no longer pay Income Tax”, said in the statement, shown at 8:30 pm.
In his statement, the minister did not detail the spending cut plan that has been prepared for more than a month by the economic team. He spoke about several measures in a generic way, but did not say how they would be implemented – whether by decree or by bills to be approved by Congress.
It is not clear, for example, when the Income Tax measure will come into force. Lula had made this promise during the 2022 electoral campaign. When he took office, he said that this exemption amount would be throughout the 4 years of his term in office.
At the beginning of his 3rd government, the PT member had increased the exemption range for those who receive up to R$2,824. On several occasions, the president stated that it would reach the value of R$5,000 by the end of his government. Haddad, on Wednesday night, did not make it clear whether this benefit would come into effect immediately.
The same doubt also remains about the increase in taxes for those with a monthly income of R$50,000 or more. The minister just said in a general way that this measure will be adopted “without excesses and respecting established international standards”.
“It’s a fair Brazil, with less taxes and more money in your pocket to invest in your small business, boost commerce in your neighborhood and help your city grow. The new measure will not have a fiscal impact, that is, it will not increase government spending. Because those with an income of more than R$50,000 per month will pay a little more. All without excesses and respecting established international standards”, these.
In his speech, Haddad also said that the announced measures are in addition to the tax reform, which he classified as “historical”. He cited tax exemption on basic food products, including meat.
“Correcting a large part of the unacceptable tax injustice, which deepened social inequality in our country”these.
