The obligation to pay Income Tax reaches a large proportion of Brazilian citizens – 44 million declarations are expected this year.
Since 1979, IR has been the Union’s main form of revenue, used for various purposes. THE Federal Revenue states that.
“IR does not have a specific destination; it makes up the country’s budget revenues”, explains the Tax Authority.
This function arises from article 167, item IV, of the Federal Constitution of 1988which establishes “the prohibition on the linking of tax revenues to a specific body, fund or expense, except for expressly provided exceptions”, recalls Camila Tapias, founding partner of Utumi Advogados.
Even so, the distribution of revenue collected by the Union is also defined in legislation. Distribution is done as follows:
- 50% of revenue belongs to the Federal Union;
- 22.5% of IR and IPI (Tax on Industrialized Products) is allocated to the State Participation Fund;
- 25.5% is allocated to the Municipal Participation Fund;
- 3% to the Participation Fund for investments in the productive sector of the North, Northeast and Central-West Regions.
After this distribution, the amounts become part of the general budget of each federative entity. According to Marcos Hangui, Income Tax specialist at King Contabilidade, this means that the money is used to sustain the public structure as a whole.
“In practice, the resources help to finance essential areas such as health, education, security, infrastructure, social programs and the payment of public servants”, explains Hangui.
The definition of the application of resources is carried out in accordance with .
Taxpayers can choose where the tax goes
The accountant highlights that there is another possibility for each citizen to pay, little known to taxpayers. Up to 6% of the tax due can be donated to specific funds, such as those aimed at children, the elderly, culture and sport.
“This choice does not represent an additional cost, but rather the redirection of part of the tax that would already be paid, and may even reduce the amount payable or increase the refund”, says Hangui.
In this context, sand a taxpayer has R$10,000 in tax due, he can allocate up to R$600 throughout the year to selected funds. According to the IR specialist at King Contabilidade, if you choose to make the allocation directly in the declaration, the limit is up to R$300 (or 3%).
Based on the IRS step-by-step guide, anyone who wishes to allocate their tax must make the donation as follows:
- Look for one Council for the Rights of Children and Adolescents or the Council on the Rights of the Elderly municipal, state or national;
- Make a donation to the Fund administered by the chosen Council;
- Keep proof of the allocation made until the following year;
- When completing the Personal Income Tax Declaration in the subsequent year, declare the amount donated in the “” tabDonations Made“.
If you wish to allocate the donation only at the time of declaration, the IRS recommends that:
- After filling in your details, choose the complete declaration model and click “Donations Directly in the Declaration“;
- Now, inside the “Child and Adolescent“, click “novo“.
- Choose the fund that will benefit;
- Repeat the process in the “” tabElderly Person“, if you wish to donate;
- When submitting your declaration, print and pay a MAY (Federal Revenue Collection Document) for each informed destination.
The Revenue guarantees that the amounts allocated to the Funds will be deducted from the tax due.
“If your declaration results in tax to be paid, the total allocated will be deducted from the outstanding balance. If your declaration results in tax to be refunded, the total allocated will be added to the refund”, he explains.
