Brazil: Lula confirms expansion of income tax exemption

President Luiz Inácio Lula da Silva said on Thursday (16) that he will expand the Income Tax for Individuals (IRPF) exemption range.

With the readjustment, the value rises to R$2,640 (around US$506.9).

“It will start from now; we will start exempting at R$2,640,” Lula said during an interview with CNN.

“Then we will go up gradually until we reach the R$5,000 exemption. It had to happen because it was my commitment, and I will do it.”

However, it was unclear from what date the measure would take effect.

In January, in a post on social networks, the Workers’ Party reported that the new range could be applied only in 2024.

“The Minister of Finance, Fernando Hadadd, has been projecting the table adjustment for 2024 since it is necessary to respect the principle of anteriority,” Lula’s party posted.

“The rule determines that changes in taxes can only go into effect in the year following the approval of the measures.”

During the interview, Lula also confirmed that the minimum wage would undergo a new increase in 2023.

“We have already agreed with union movements, with the Ministry of Labor, with Minister Haddad, that we will, in May, readjust the value of the minimum wage to R$1,320,” he commented.

In practice, the figure means an R$18 increase over the current R$1,302.

After the discounts for the INSS, the amount is even smaller, falling to about R$16 in the worker’s pocket.

The amount is enough, for example, to buy two or three liters of milk, depending on the brand.

With information from Revista Oeste