Luiz Marinho confirms exemption from IR for those earning up to R$ 2,640

As of May, formal workers who earn up to R$ 2,640 will be exempt from the Individual Income Tax (IRPF), confirmed today (28) the Minister of Labor and Employment, Luiz Marinho. According to him, the government is fulfilling a campaign commitment by President Luiz Inácio Lula da Silva to gradually raise the exemption range.

“There is a commitment by President Lula to exempt wages of up to R$5,000 from income tax until the end of the government. For the time being, wages of up to R$2,640, as of May 1st, will not have withholding income tax. During the mandate, we will return to talking about exemption when the economic condition allows it”, said the minister, after the signing ceremony of the adjustment 9% for employees of the Federal Executive.

The increase in the exemption will occur by combining two measures. The exemption range in the IRPF table will go from R$ 1,903.98, the amount in force since 2015, to R$ 2,112. In addition, there will be a R$ 528 discount on the tax paid at source, automatically withheld every month.

When adding the two values, the new exemption range and the discount, the value reaches R$ 2,640. The amount is equivalent to two minimum wages of R$ 1,320, an amount that will take effect from May. Until the end of April, the minimum wage is R$ 1,304.

The Minister of Labor and Employment informed that the measure should be instituted by a “discretionary act” of the Federal Revenue Service. According to the minister, the formalization of the increase “is being processed” within the body.

According to the Federal Revenue, 13.7 million taxpayers will stop paying Income Tax from next month with the exemption for those who receive up to R$ 2,640. This is equivalent to 40% of the individuals who pay the tax.

Minimum wage

Regarding the increase in the minimum wage to R$1,320, Marinho said he had already signed the provisional measure (MP). “I have already signed the MP for the minimum wage, the president’s signature is missing,” he said. The raising of the minimum was officially decided this Thursday (27th) in a meeting between president Lula, the trade union centrals and ministers of the economic area. The measure will be announced during the Labor Day celebrations in São Paulo, but it is not yet known whether the MP will only be published on May 1st or will come out before, in an extraordinary edition of the Official Diary of the Union.

The government also intends to send soon to Congress the project for the policy of permanent appreciation of the minimum wage, which would come into force from 2024. by the National Consumer Price Index (INPC) plus the Gross Domestic Product (GDP) growth of two years earlier. If the GDP shrinks, there would only be a return to inflation.

The Ministry of Finance defends another formula, based on GDP per capita. Marinho, however, denied differences with minister Fernando Haddad during the meeting this Thursday at the Alvorada Palace. “My relationship with Haddad is good and has always been good. I didn’t understand what came out today saying that I had an altercation with Haddad”, countered Marinho.