BRASILIA (Reuters) – President Luiz Inácio Lula da Silva sanctioned this Wednesday the bill that expands the monthly income range exempt from Income Tax to R$5,000 and creates a minimum tax for higher-income people.
Approved in early November by the National Congress, the project establishes a minimum tax of up to 10% on people with an annual income exceeding R$600,000 to compensate for the loss of revenue generated by the exemption.
The new law also grants a discount on Income Tax to those who receive up to R$7,350.
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With presidential sanction, the expanded exemption will come into effect in 2026, when there will be elections and with Lula seeking re-election.
The presidents of the Chamber of Deputies, Hugo Motta (Republicanos-PB), and of the Senate, Davi Alcolumbre (União-AP) did not attend the project’s sanctioning ceremony at Palácio do Planalto.
At the event, the Minister of Finance, Fernando Haddad, said that Brazil “really needs” the work and leadership of Motta and Alcolumbre so that the government can successfully conclude this year.
