The discussion on the proposal to exempt income tax for those earning up to R$5 thousand monthly will begin this Tuesday (14), at CAE (Economic Affairs Commission) do Senatefrom a public hearing.
The Minister of Finance, Fernando Haddad, confirmed presence at the meeting, which aims to promote the federal government’s strategy around PL 1087/2025 and explain the expected impacts on revenue collection and the progression of the tax system.
The hearing is scheduled to take place from 10 am (Brasília time). The proposal,also includes the expansion of the partial exemption limit for those earning up to R$ 7.350 and is one of the president’s campaign promises Luiz Inácio Lula da Silva (PT).
The approved text provides that the compensation of the tax collection will be made by a higher charge, of 10%for those who earn more than R$600 thousand per year — that is, R$50 thousand per month.
The projection is to reach around 141.1 thousand high-income taxpayers with the compensation model, benefiting, on the other end, 16 million. Currently, the effective rate for the class is 2,5% on total income.
In press interviews, and may be sanctioned by the president in October.
The expectation remains in line with what was declared by senator Renan Calheiros (MDB-AL), rapporteur of the proposal in the Senate. Calheiros, who also works in the Legislative House as president of CAE, on the topic before presenting its opinion to the Commission.
The days fall into Tuesdays and Thursdays of the next two weeks. In addition to Haddad, the presence of a representative from the Federal Revenue Service is also expected.
After the hearings, the text must be analyzed by the committee, and only then taken to the Senate plenary. If approved, it goes to the President of the Republic for sanction.
Main points of the proposal
which, according to government projections, would reach an additional 10 million people.
The text, however, also wants to partially reduce taxes in a phased manner for those earning between R$5,000 and R$7,350, which would benefit a total of 16 million taxpayers.
At the other end, to compensate for the expansion of IR exemption, the proposal creates the so-called “minimum tax” for high-income taxpayers, who have a large part of their income exempt (such as profits and dividends).
The project also brings as a novelty the taxation on dividendscurrently exempt in the country. They will be subject to a fixed rate of 10% when payments in a month exceed R$50,000 per company. This also applies to investors who are not residents of the country.
Income excluded from the calculation of high income
According to the text, which is still under analysis in the Senate, the following income will not be computed:
- Heritage;
- Savings income;
- Compensation for accidents or serious illnesses;
- Retirements resulting from serious illnesses or work accidents;
- Dividends paid by foreign governments;
- Payments from sovereign wealth funds;
- Foreign entities that administer pensions;
- Exempt securities (LCI, LCA, LCD, CRI, CRAs, FIIs, Fiagros, encouraged debentures and infrastructure investment funds).
