Changes in the simplified declaration can raise the income tax of those who earn more than R$ 10 thousand

RIO and BRASÍLIA – The reduction of the automatic discount given by the Federal Revenue to those who file the Income Tax return by the simplified model, as provided for in the text of the tax reform approved yesterday in the Chamber, will increase the tax paid by taxpayers who earn from R$10,000 a month, or R$120,000 a year, and they use this model.

For those with income below this range, the proposal will reduce spending on income tax. This is because, despite the bill’s rapporteur, deputy Celso Sabino (PSDB-PA), having reduced the ceiling of the simplified declaration discount from the current R$ 16.7 thousand to a maximum of R$ 10.5 thousand, the proposal also increases. the exemption, that is, the portion of the salary that frees the tax and this makes up for the smaller discount.

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A simulation carried out by the EY consultancy, at the request of GLOBO, shows that, if the reform passes, taxpayers who have an annual income of R$ 120 thousand will have an increase in tax payable of R$ 17.26. And the higher the salary, the greater the difference.

A worker who earns around R$6,700 per month or R$80,000 per year would save R$190.18 on the same system. For an even lower salary, around R$3.3 thousand per month or R$40 thousand per year, I would pay R$536.42 less than under the current rules. The annual salary account does not include the 13th, which is taxed separately.

Art Publishing Photo: Reproduction / O GLOBO
Art Publishing Photo: Reproduction / O GLOBO

The simplified model can be used by any taxpayer and guarantees a discount of 20% of the income that will be taxed, currently limited to a maximum of R$ 16,7 thousand. It is advantageous for you to not have expenses that can be deducted from the full statement, such as dependents, doctors and schools.

The government wanted to restrict the simplifies declaration to taxpayers with annual earnings of up to R$ 40,000, but the rapporteur overturned this article. In return, reduced the standard discount.

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table correction

Antonio Gil, tax partner at EY Brasil, and Felipe Coelho, the company’s tax manager, explain that the benefit for lower income groups is a result of the correction of the progressive Income Tax table, which has been frozen since 2015.

The proposal updates the table and with that, the tax-free portion of the salary increases from the current one to R$22,800 to R$30,000 per year. The reduction of the standard discount, by itself, makes the taxpayer more expensive.

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— In fact, given the Brazilian reality, the readjustment of the income tax table versus the reduction of the simplified discount ceiling will benefit many more people than harm — highlights Antonio Gil.

Felipe Coelho adds that, in general, people with income above R$ 10 thousand opt for the full declaration, because they have expenses that can be deducted.

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— Often the highest income and is accompanied by higher expenses. So many of these people have dependent private pensions, school expenses. For this installment, the ideal is the full statement. So you can have the advantage of taking advantage of the readjustment of the progressive table and will not be impacted by the reduction of the simplified discount ceiling — he explains.

The tax reform proposal ended up being approved in the Chamber yesterday. The opposition even presented a highlight to revise the table’s correction. Deputy Afonso Florence (PT-BA) wanted bigger changes.

— As it is in the table, from R$ 5,301 reais, the salaried person will pay 27.5% of income tax. It’s too regressive a table.

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Sabino defended his text.

– We removed the limitation for the simplified deduction in the table of Income Tax of the individual, allowing no Brazilian to have tax increases – he said.

The proposal still needs to be voted on in the Senate.