Seven months after being sent by the government, the project that expands the income tax exemption range to those who receive up to $ 5,000 per month should be voted on Wednesday by the House of Representatives. The text, reported by the former president of House Arthur Lira (PP-AL), was placed as the only item of the agenda, in an attempt to shield the vote and ensure one of the main legislative victories of Lula management in 2025.
The project arrives at the plenary with a pacified point – the exemption up to $ 5,000 – but with a deadlock on how to compensate for the loss of revenue. Preliminary estimates point to an impact of about R $ 30 billion annually on the exemption.
On Tuesday, Lira reaffirmed that “in theory, our report is maintained,” but admitted that the equation of compensation still needs to be closed. In a meeting with the Parliamentary Front of Agriculture, it was straightforward:
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“No one is here to brown the pill, no. Compensation will burden.”
On the same day, President Luiz Inacio Lula da Silva met at a reserved lunch with Senate President David Alcolumbre (Union-AP), and Mayor Hugo Motta (Republicans-PB). Lula asked for a commitment to approve the text without startles, while Hugo reaffirmed that the theme will have absolute priority in the house and alcohubre pledged to speed the Senate.
The government is in a hurry, since the measure needs to be approved by December to be able to be valid in 2026, an election year, when Lula wants to use tax exemption as an electoral flag. According to Planalto, it is estimated that ten million Brazilians will benefit.
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What provides for Lira’s report:
Exemption up to R $ 5 thousand
Workers who receive up to $ 5,000 monthly are totally exempt from going.
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Transition track up to R $ 7,350
Between $ 5,000 and $ 7,350, there will be progressive discount. Those who earn $ 6,000, for example, will pay less tax than today, but will not be exempt. The increase in the limit compared to the original government text (R $ 7 thousand) was a lyre concession.
Minimum 10% rate for high incomes
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Individuals with annual income exceeding R $ 1.2 million are subject to a minimum rate of 10%, as a form of compensation. Lira states that it will be up to the plenary to decide.
Taxation of profits and dividends sent abroad
Profits and dividends sent over R $ 50,000 monthly are taxed at 10% of going to the source. The rule reaches large companies with members outside the country. Dividends paid until December 2025 are left out as a transition.
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Reducing mechanism to avoid double double
The report creates a reduction: if the sum between IRPF, IRPJ and CSLL exceed the load that would be due, there will be a rebate.
Compensation to states and municipalities
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The Union will have to automatically pass resources to states and municipalities that lose revenue, via FPE and FPM. The measure was the requirement of governors and mayors to support the project.
Use of surplus to reduce CBS
If the collection with dividends and high incomes overcome the need to compensate states and municipalities, the surplus will serve to reduce the tax rate on goods and services (CBS).
The impasse of compensation
The main obstacle is how to play the tax waiver of the IR exemption. An amendment of Deputy Claudio Cajado (PP-BA), signed by 35 parliamentarians, expands the partial exemption range up to R $ 7,590. To fund, it creates an additional 5% at CSLL on banks and financial institutions with profit over R $ 1 billion per year. The proposal found support in the house, but must face reaction from the financial sector.
Other suggestions ventilate increase the tax on online bets or technology companies, but Planalto fears opening many fronts. Lira has already warned that you will need to “tie very well” any decision to avoid future risks:
“We have to tie this very well so as not to take a cascudo ahead,” said Lira, on Tuesday, about the popular reaction.
Expectation for the plenary
The strategy is to approve the text later this Wednesday to be able to send it to the Senate, where alcohubre signaled support. Behind the scenes, leaders do not discard dragged vote if highlights of compensation advances. An alternative considered behind the scenes is to slice the vote: approve the exemption, consensus, and leave the sources of costing for separate decision.
The hypothesis is not well regarded by the surroundings of Motta, which evaluates that there was already delay. Initially, the government had asked the vote to be conducted until September. The drag made Renan Calheiros propose a brother in the Senate and there is a certain fear among the leaders that the house loses the protagonism.
