Bill to expand income tax exemption advances in the Chamber; plenary approval is missing

A special committee of the Chamber of Deputies approved, this Wednesday 16th, the bill from the Lula (PT) government that foresees exempting people who earn up to 5 thousand reais per month from Income Tax.

The bill is expected to be voted on in the plenary in August, after the recess. If it receives approval from the majority of the House, it will proceed to the Senate.

Under the reporting of Arthur Lira (PP-AL), former Speaker of the Chamber of Deputies, the text maintained most of the government's proposal, which includes a 10% tax rate for those earning R$1.2 million or more per year. This is a way to offset the increased exemption for those earning up to R$5,000.

Currently, anyone earning up to 3,036 reais, the equivalent of two minimum wages, according to this year's value, is exempt from income tax.

Lira also extended the income tax deduction to those earning between R$5,000 and R$7,350 per month . The government's original proposal included a reduction in the tax rate for those earning up to R$7,000. The rapporteur predicted that the expansion could benefit up to 500,000 people.

Another change was the return to the text of the possibility of legal entities gaining tax credits if the minimum IR charge for partners, added to IRPJ and CSLL, is above 34%.

The text provides for the application of a "reducer" to the calculation in these cases, so that the maximum tax rate does not exceed 34%. The reduction will be applied through tax credits granted in the annual income tax return.