BRASILIA (Reuters) – The Senate’s Economic Affairs Committee (CAE) approved this Wednesday the project that expands the exemption from Income Tax for those earning up to R$5,000 a month, grants a discount to those who receive up to R$7,350 and creates a minimum tax for people with higher incomes.
The approved text, the result of a report by senator Renan Calheiros (MDB-AL), does not bring changes of merit in relation to the version approved by the Chamber of Deputies in October.
The project now goes to the Senate plenary, with the possibility of a vote this Wednesday. If it is maintained without changes, it will be sent directly for presidential sanction, without the need for new analysis by deputies.
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The text maintains a minimum tax of up to 10% on high-income people to compensate for the loss of revenue generated by the exemption, a measure proposed and defended by the government of President Luiz Inácio Lula da Silva.
The exemption needs to be approved by Congress by the end of this year to take effect next year, when there will be elections and President Lula must seek re-election.
To avoid changes to the text of the IR, Calheiros articulated the approval of an additional project that increases taxation on online betting and fintechs, arguing that the extra revenue will help to compensate for municipal revenue losses.
On Tuesday, the commission even predicted a vote on the two projects this Wednesday. However, Calheiros informed that the CAE analysis of the text dealing with bets and fintechs will be scheduled for next week.
