Income tax exemption should boost consumption and inject up to R$ 28 billion into the economy in 2026.

247 -The approval in Congress of the proposal by the Lula (PT) government that raises the income tax exemption threshold to monthly incomes of up to R$ 5 promises to ease the budget of the middle class and stimulate consumption next year. The measure also reduces taxation for salaries up to R$ 7.350, which could have a significant impact on economic growth.

According to the newspaper The GlobeThe new tax table, approved by the Senate and sent to President Luiz Inácio Lula da Silva for his signature, could inject between R$ 20 billion and R$ 28 billion into the economy in 2026. The text establishes a minimum tax rate of 10% for incomes exceeding R$ 50 per month, guaranteeing the necessary fiscal compensation.

The middle class is the main beneficiary.

Although the government emphasizes that the change aims to benefit the poorest, data from Tendências Consultoria shows that the greatest impact will be among middle-class taxpayers. Currently, the exemption threshold goes up to R$ 3.036 — the equivalent of two minimum wages. The study indicates that 51% of those benefiting are in the Southeast, predominantly in São Paulo, while the North and Northeast will have a limited impact, with 5,7% and 13,4% of those benefiting, respectively.

The profile of taxpayers who will stop paying the tax includes, predominantly, white men, employed with formal contracts in the private sector and with a completed higher education. "These people are far from being poor," observes economist Thiago Xavier, from Tendências, who co-authored the study with Giuliana Folego.

Relief for your wallet and consumption plans.

For many Brazilians, the benefit represents a chance to reorganize their budget. Fernanda Martins, a 32-year-old teacher from Rio de Janeiro, says she intends to use the tax break to invest in her own home. "My monthly income covers fixed expenses, but very little is left over for any other type of planning. Saving, putting money aside, investing are very difficult things. The surplus is minimal. This break will allow me to invest in a house with more security, needing a smaller financing margin. It's money that makes all the difference. It will also give me more peace of mind to deal with everyday emergencies, such as buying medicine, a leisure activity for my daughter, clothes, or some household item," she stated.

According to economist Paulo Henrique Pêgas, from Ibmec-RJ, someone earning R$ 5 per month will save around R$ 300 per month, representing an annual saving of approximately R$ 3,9, considering the 13th-month salary bonus.

Effect on consumption and indebtedness

Experts point out that part of the gain can be used to pay off debts before turning to direct consumption. "Since indebtedness is high, these families will have to pay off some debts, and then move on to consumption," analyzes Marcos Pazzini, from the consulting firm IPC Marketing. He explains that the beneficiary public is between class C and the lower end of class B — consumers who prioritize food, rent, and health, but who take advantage of budget leeway to improve household goods.

Pazzini adds that the measure could encourage the purchase of electronics in 2026, especially because of the World Cup: "Next year there will be a World Cup, and some may want to replace their TV. If they finance it in ten installments, even with high interest rates, they might be able to pay because they will have some leeway with the lower income tax."

Economic and social impact

Studies by Tendências, from the Getulio Vargas Foundation (FGV) and the Center for Research in Macroeconomics of Inequalities (Made/USP) estimate that the measure could generate between R$ 20 billion and R$ 28 billion. According to researcher Guilherme Klein, from Made and professor at the University of Leeds, the new format reduces tax inequality, albeit modestly.

Popular approval and political landscape

The change in income tax comes in a context of high interest rates and low unemployment, combining policies to stimulate consumption with macroeconomic challenges. According to research by Quaest in partnership with Genial Investimentos, 79% of voters approve of the measure, and 90% believe it will bring some financial improvement.