One year before the elections, President Luiz Inácio do Lula da Silva stated that the expansion of the Income Tax exemption range for those earning up to R$5,000 will be “almost a 14th salary”. In a speech on radio and TV this Sunday, Lula suggested that those covered by the measure could use the “extra income” to pay off a debt or buy a television with a larger screen to watch the 2026 World Cup.
“From January of next year, what is currently a discount on your paycheck will become extra money in your pocket. To travel with your family. Eat what you like most. Buy Christmas presents for your children. Pay off a debt. Advance an installment. Buy a television with a bigger screen to watch the World Cup next year,” said Lula.
The IR exemption law was sanctioned by the president on Wednesday, 26th, and was a campaign promise from the PT member. Throughout his speech, Lula avoided using the word “exemption” and preferred to talk about “zero income tax”, the same term that was used when publishing the speech: “With zero income tax, a person with a salary of R$4,800 can save R$4,000 in one year. It’s almost a 14th salary”, he said.
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Lula defended that the measure aims to attack inequality in the country and highlighted that, in addition to increasing the exemption range, the law provides for a minimum tax of 10% for the super-rich, who he stressed are 0.1% of the population. “More than a correction to the income tax table, the new law attacks the main cause of inequality in Brazil: the so-called tax injustice”, he declared.
He again used a speech against the richest and said that, over 500 years of history, the Brazilian elite accumulated “more and more privileges” and that, among them, “perhaps the most shameful is paying less income tax than the middle class and workers”.
Lula said that, today, those who “live off the sweat of their work and actually build the wealth of this country” pay up to 27.5% in income tax, while “those who live on income” pay only 2.5%, on average. “Those who live in a mansion, have money abroad, collect imported cars, private jets and jet-skis, pay ten times less than a teacher, a police officer or a nurse.”
The president classified the situation as “unacceptable” and said that “it was necessary to change”. He added that the change in IR is a decisive step towards transforming the reality of inequality in Brazil, but that it was only the first.
“You can be sure that we will not stop there. What we want is for the Brazilian population to have the right to the wealth they produce with the sweat of their work. We will remain firm fighting the privileges of the few to defend the rights and opportunities of the many.”
