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Brazil’s lower house approves an increase in tax exemptions for low-income people
The bill exempts monthly income up to 5,000 reais for low earners and introduces a minimum tax rate for wealthy individuals to offset revenue loss, benefiting 15 million workers.
- Brazil's lower house approved increasing the income tax exemption to 5,000 reais per month, fulfilling a key 2022 electoral promise by President Lula.
- The bill, introduced in March by Lula's leftist government to offset revenue loss, includes a minimum effective tax on individuals earning over 600,000 reais annually.
- The exemption would more than double the previous threshold and the tax on high earners would scale up to 10% for incomes exceeding 1,200,000 reais, targeting about 141,000 wealthy individuals.
- Economist Carla Beni said the exemption corrects tax imbalances where many rich pay less proportionally and predicted people will spend more, save, or pay debts, while Speaker Motta called the exemption a right and a social justice step.
- If the Senate approves, Lula will sign the reform into law for implementation on January 1, 2026, with the measure expected to benefit 15 million workers and reinforce Lula's political support ahead of his re-election bid.
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Associated Press News+8 Reposted by 8 other sources
Brazil’s lower house approves an increase in tax exemptions for low-income people
Brazil’s lower house has approved exempting up to 5,000 reais ($940) a month from income taxes. That would more than double the current exemption and meet a key priority of President Luiz Inácio Lula da Silva’s 2022 election campaign.
·United States
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The initiative states that starting in 2026, workers who charge about $940 per month will not have to pay the income tax.
Coverage Details
Total News Sources11
Leaning Left5Leaning Right1Center3Last UpdatedBias Distribution56% Left
Bias Distribution
- 56% of the sources lean Left
56% Left
L 56%
C 33%
11%
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