Income Tax: experts point out impacts and perspectives on exemption for those earning up to R$5,000

In the assessment of tax lawyer and master in Law from PUC-SP, Thulio Carvalho, despite the government having informed that it intends to compensate for this measure by increasing taxes on those who receive more than R$50 thousand monthly or R$600 thousand annually, there is the emergence of uncertainty in the country’s fiscal scenario.

“This proposal will not necessarily be approved as such by the National Congress. And, with parliamentarians agreeing to approve this expansion of the income tax exemption range, but disagreeing with the creation of more taxes on salaries above R$50,000, the question arises as to where it will come from. the revenue corresponding to this new tax exemption. There is, indeed, an environment of uncertainty due to the need to restore revenue”, he explains.

Financial market reaction

The announcement also provoked a reaction in the financial market. The dollar, for example, rose to R$6, reaching a historic level. Given the worsening fiscal perception, the Brazilian stock exchange index (Ibovespa) fell 1.73%, to 127,668 points, at the lowest point of the trading session, also influenced by other external factors.

Rising dollar and rising future interest rates; How the market reacted to the announcement of government spending cuts

“In relation to the medium and short term, this instability, for example, could hamper the recovery path of the real in relation to international currencies, precisely because this announced measure, with the instability it entails, tends to leave markets on alert. and hinder the circulation of resources in relation to our country”, points out Carvalho.

On the other hand, for the president of the São Paulo Economists Union, Carlos Eduardo Oliveira Jr., the measure generates a valid discussion, as, in fact, there is a reduction in revenue on the part of the government but, in a way, people from this income range may start to consume more, driving sectors such as Commerce and Services.

“It has generated and is generating intense debate, because there is a loss of revenue, but this extra money comes in consumption, with the prospect of an increase in consumption”, he considers.

The president of the Senate, Rodrigo Pacheco (PSD-MG) stated that this measure should not be discussed soon. This point should only be sent to Congress in 2025 and, if approved, it should only come into effect in 2026.

According to the National Association of Tax Auditors of the Federal Revenue (Unafisco), the income tax exemption for those earning up to R$5,000 covers 36 million taxpayers. This represents 78.2% of the total of R$46 million that declare Income Tax annually.