Haddad: Income Tax bill will face debate to approve counterpart measure.
According to the minister, 'the difficulty is making those who don't pay pay to compensate' for the income tax exemption for people with salaries up to R$ 5.
Bruno Bocchini - Reporter for Agência Brasil
Finance Minister Fernando Haddad said on Friday night (21) that the federal government's project to exempt people earning up to R$ 5 from Income Tax should be approved by the National Congress. However, he noted that the compensation for the exemption will face "the real debate".
"The difficulty lies in getting those who don't pay to pay in order to compensate, which is the counterpart," said the minister on the Inteligência Ltda. podcast.
“We’re going to have a few months of debate, which is great. The more debate there is, the more society is involved, the better. It will be very difficult for a congressman to speak out against the exemption. So what will the real debate be? The compensation, who pays. What we agreed cannot happen is giving the benefit without compensation,” he added.
According to the Ministry of Finance, more than ten million Brazilians are expected to benefit from the increase in the income tax exemption bracket, announced last Tuesday (18) by President Luiz Inácio Lula da Silva. The project has already been sent to the National Congress.
According to the ministry, the proposal should have a neutral impact on government revenue. The exemption is expected to generate a projected tax revenue loss of R$ 25,8 billion and will be financed by taxing approximately 141,3 people who earn more than R$ 50 per month – that is, 0,13% of all taxpayers in the country. If approved by Congress, the proposal will take effect in 2026.
