Candidates promise revenue tax exemption for individuals who earn as much as R$ 6 thousand; see proposals
Presidential candidates make promises with an eye on the more than 15 million Brazilians who would benefit if the IRPF table were adjusted for inflation
This year’s electoral campaigns are keeping an eye on the votes of those who can win with the correction of the Income tax of individuals: the middle class. If the official figures were updated according to inflation, 15.4 million Brazilians would stop paying the IRPF in 2023, according to the calculations of the National Association of Tax Auditors of the Federal Revenue (Unafisco Nacional).
Currently, declaring income tax is an obligation for everyone who earns at least R$ 1,903.98 per month. Anyone who receives less than that is exempt — that is, they don’t have to pay. But since this income bracket has been the same since 2015, the rise in inflation has been completely disregarded for seven years.
Of the 11 candidates for the Presidency of the Republic, eight mention this gap in government plans or have already spoken about it during the campaign. The most common promise, made by four of them, is exempt from IRPF workers who receive up to five minimum wages, the equivalent, today, to R$ 6,060. The government would fail to collect, in this case, R$ 226.8 billion in a year, according to Unafisco.
Given the high fiscal impact of the measure, some candidates avoid making promises related to the IR. Some, when talking about the subject, condition the updating of the table to a broad tax reform, which would help to offset losses, with measures to combat evasion or creation of charges on profits and dividends or large fortunes.
See what the candidates for the Presidency of the Republic say about Income Tax, organized in alphabetical order:
Ciro Gomes (PDT)
Ciro’s government plan does not detail the candidate’s proposals for the Income Tax table, but mentions that it intends to “change the composition of the tax burden in the country, which means, in proportional terms, a reduction in taxation on production/ consumption and the increase in income tax”.
Ciro’s campaign team told EXAME that, if he is elected, he will update the IRPF table, raise the exemption range and create new higher rates for the richest. The new exemption ranges and rates, however, have not yet been defined and are still being studied.
“The idea is to tax the poorest and middle class less and proportionally increase taxation on the richest,” said the candidate’s campaign. “Another important point that will be observed in a Ciro Gomes administration is the lower taxation on consumption and production and proportionally higher on income.”
Felipe D’Ávila (New)
In the government plan, D’Ávila does not specifically commit to updating the Income Tax table, but guarantees to “simplify taxation on consumption, income and payroll”. Questioned by EXAME on the subject, the candidate replied that “with a broad tax reform, we will be able to correct the IR table”.
D’Ávila conditions the correction to the reduction of government expenses, which would be necessary to accommodate the revenue loss. “Let’s do all this responsibly: you can only reduce taxes if you cut government spending. Tax reduction without spending cuts is just throwing the debt off for your children and grandchildren to pay back there in the future,” he said.
The candidate commented that “the delay in updating the table means that, in practice, the tax is going up”. He recalled that, in 2015, a worker who received up to 2.4 minimum wages was exempt. “Today, the exemption is only for those who receive up to 1.6 minimum wage. In other words, the tax has increased”, he pointed out.
The tax reform proposed by the Novo candidate provides for “the replacement of outdated taxes by a value-added tax (VAT), as well as the standardization of income taxation rules and the amendment of payroll taxation rules, with a focus on formalization”.
Jair Bolsonaro (PL)
Bolsonaro guarantees that, if re-elected, he will correct the Income Tax table, a promise that was also made in the 2018 election campaign. exempt from paying the tax workers who receive up to five minimum wages, which is equivalent, today, to R$ 6,060.
In the document, the president recalls that he proposed, in July 2021, the reform of the Income Tax, with a 31% correction in the IRPF table, exempting CLT workers who receive up to R$ 2,500 monthly. “The text was approved by the Chamber, but it did not advance in the Senate”, he says.
The text of the IRPF reform is stalled in Congress due to a lack of consensus, including among the government. “The re-elected government of Jair Bolsonaro will continue to pursue the implementation of this proposal and the expansion of the exemption for workers”, promises Bolsonaro, in his plan.
Jose Maria Eymael (DC)
Eymael does not address the matter in the government plan, but, when questioned by EXAME, he said that “fundamentally, a first proposal is imposed: to establish the exemption from income tax for workers who receive up to five minimum wages”. He said he intends to include the suggestion in the government’s plan.
The candidate also stated that the eventual creation of new rates “is an object of study”, but considers that “it is necessary to have balance in this situation”. Eymael recalled that he is the author of proposals that are now in the Federal Constitution in defense of the taxpayer, “including the section that prohibits the tax from having the effect of confiscation”.
Leonardo Pericles (UP)
Leonardo Péricles’ government plan provides for “progressively restructuring the Income Tax rates, increasing the exemption range of most poor families”. The change would be part of a “popular tax reform”, which would increase the IRPF rate of millionaires and billionaires.
Pericles promises to tax great fortunes; create or increase taxation on large estates, profits and dividends; and review the policy on the Tax on the Circulation of Goods and Services (ICMS), which “taxes rich and poor equally”.
Luiz Inácio Lula da Silva (PT)
In the government plan, Lula does not clearly say that he will update the income tax table, but he is committed to proposing a “solidarity, fair and sustainable tax reform, which simplifies taxes and in which the poor pay less and the rich pay more”. He guarantees that the proposal will “correct tax injustice by guaranteeing progressivity”.
Although the idea is not explicit in the government plan, Lula stated, at the beginning of the electoral campaign, that he is studying proposing the IRPF exemption for people earning up to BRL 5,000 per month — which would cost, according to Unafisco, R$ 199.8 billion. The loss of revenue would be offset by measures such as taxation of profits and dividends.
“If everything is readjusted in this country, why can’t the income tax table be readjusted for those who live on a salary?”, asked Lula, in an interview with Rádio Super, in Minas Gerais, on August 17. The matter, however, was still being evaluated by the candidate’s economic team.
In the government plan, Lula says that he intends to “make the very rich pay Income Tax, using the resources collected to invest intelligently in programs and projects with a high capacity to induce growth, promote equality and generate productivity gains”.
The ex-president’s campaign team told EXAME that the commitment of an eventual PT government is “to resume updating the table and build, within the tax reform, a fairer system, with more progressive income tax rates, that relieve workers who earn less and that burden the income of the very rich”. The readjustment in the table “will also mean the expansion of the exemption range“.
Pablo Marcal (Pros)
Marçal’s government plan does not bring any specific proposal on the Income Tax. To EXAME, the candidate stated that will correct the IRPF table for inflation“which aims to guarantee the maintenance of the population’s purchasing power, especially those with lower contributory capacity”.
The objective is to simplify the tax system. In this sense, Marçal proposes to create a single tax, which will replace 11 federal taxes, “reducing bureaucracy and evasion, increasing social justice and employability”. “I will follow the line of simplification of the entire tax chain, and with the Income Tax it will be no different”, he said.
Simone Tebet (MDB)
Tebet’s government plan makes it clear that, if elected, she will “reform the income tax, to eliminate regressiveness from our system.” But it does not detail how this will be done, what the IRPF exemption range will be and whether new rates will be proposed.
To EXAME, the candidate stated that “IR table correction is requiredbut it is even frivolous to establish tax rates and exemption ranges at this moment without putting it within the scope of a broad tax reform in the country”.
Tebet highlighted that the cost of updating the IRPF table, in the federal budget, would be “extremely heavy”, which could “jeopardize the maintenance and implementation of social programs, essential in this moment of crisis”. The matter, she said, “must be seen in a larger context.”
The candidate conditions the correction to a tax reform that relieves consumption and unifies taxes, “taking care not to stimulate federative imbalances”. One of Tebet’s commitments, if elected, is to approve a tax reform in the first six months of government.
“It is possible. The current government just doesn’t solve this issue because it doesn’t want to”, Tebet told EXAME. In general terms, she defended a system “more progressive and not regressive as we have today: those who can afford more, pay more; who can afford less, pays less”.
Sofia Manzano (PCB)
Sofia Manzano proposes, in the government plan, the exemption from IRPF collection for those who earn up to five minimum wages per month. She suggests the adoption of a progressive table up to a percentage of 40% for those earning more than 60 minimum wages per month (R$ 72,720 this year). Today, the highest rate is 27.5%, which is levied on income above R$ 4,664.69.
The rate of 40%, according to Manzano, would reach 2.7% of the declarants. The PCB candidate advocates “a progressive tax reform”, with taxation of profits and dividends, large fortunes, inheritance and financial transactions. In addition, if elected, she intends to institute the free transport pass for students and workers exempt from IRPF.
Soraya Thronicke (Union Brazil)
Although Soraya Thronicke’s government plan does not deal with Income Tax, the candidate guarantees that, if elected, will exempt from paying the tax those who earn up to five minimum wages a month.
During the presidential debate at the Band, on Sunday, 28, Soraya said that she wants to “exempt all teachers from income tax, both in public and private education. The cost, according to her, would be R$ 10 billion per year. “This is no fairy tale. This is true, it has already been studied,” she stated.
Thronicke’s campaign team told EXAME that the proposal emerged from studies by the economic team and “will be a priority for the candidate, if elected president”. The impact will be absorbed by “measures to reduce costs, strict fiscal control and fight against evasion”.
In the government plan, Soraya says that “tax reform will be the government’s number one priority”, with a focus on unifying taxes. The objective is to “radically simplify the tax system”.
Vera Lucia (PSTU)
Vera Lúcia defends, in the government plan, exemption from payment of Income Tax for those who earn up to 10 minimum wages, the equivalent, today, to R$ 12,120. “From there, an increasing rate would be instituted according to individual income, with a 50% tax rate for the richest”, he explains. The candidate did not make it clear what the income cut of those considered to be the richest would be.