The proposal, one of the main campaign promises of President Luiz Inacio Lula da Silva, now goes to the Senate vote; text received 493 favorable votes, with the support of all parties, including the opposition
The House of Representatives unanimously approved, on the night of Wednesday (1st), the bill that expands the exemption range of the for taxpayers with monthly income of up to R $ 5,000. The proposal, one of the president’s main campaign promises (PT), now goes to the Senate vote. If approved without changes, the measure is valid in January 2026.
The text received 493 favorable votes, supported by all parties, including the opposition. In addition to the exemption, the project foresees partial exemption for those who earn up to R $ 7,350. About 16 million Brazilians are expected to benefit. The rapporteur Arthur Lira (PP-AL), mayor, expanded the scope of the original government proposal, which raised the annual cost of the measure of R $ 25.8 billion to R $ 31.2 billion. According to him, it is “a first step to correct the tax and social distortion of the least people who receive it.”
To compensate for the loss of revenue, the proposal creates a new taxation on the richest. The minimum income tax rate will focus on taxpayers with annual income over R $ 600 thousand (R $ 50 thousand per month) and will reach 10% for those who receive R $ 1.2 million or more per year. In addition, dividends over R $ 50,000 monthly will be taxed by 10% at the source. According to the IRS, about 141,000 high -income taxpayers will be affected. Today, they pay an average of 2.54% tax, well below the effective rate of middle -class workers, such as teachers and police, which exceeds 9%.
Lira’s report, however, made concessions. He withdrew from the calculation of taxable income 80% of rural activity gains and excluded income from financial investments such as LCIs, LCAS, CRIS, CRAS, Encourages and Encouraged Debentures. It also determined that dividends calculated until December 2025 and paid by 2028 are exempt from new taxation.
Minister Gleisi Hoffmann, responsible for the government’s political articulation, accompanied the vote in the plenary and said he expects quick senate proceedings. “After the tax reform on consumption, Congress now also begins to respond also to tax and property tax,” he said. With approval in the House, the government intends to use the measure as an electoral showcase in 2026, reinforcing the promise of relieving the tax burden on low and medium -income workers.
*Reproduced with the aid of AI
