Bolsonaro asks for solution to expand income tax exemption

BRASILIA – The president Jair Bolsonaro asked the Ministry of Economy a solution for the correction of the table of the Personal Income Tax (IRPF) still this year. This was a campaign promise made by the president in the elections and he warned the team that he wants to fulfill it because he knows that voters will demand it, while opponents will say that he did not do what he promised, according to the Estadão with credible sources.

During the campaign, Bolsonaro promised to correct the exemption range to five minimum wages (today, R$6,060). Currently, only those with an income of less than BRL 1,900 per month are exempt from the IR.

Unlike taxation on profits and dividends, the table’s correction can take effect the same year as congressional approval. Bolsonaro can edit a provisional measure (MP), which takes effect immediately, although it needs to be approved by deputies and senators within 120 days. technicians from IRS make new simulations of the loss of revenue with the measure.

The biggest problem continues to be the compensation for the loss of income, because in the case of the correction of the table there is no impact on the spending ceiling – the rule that limits the growth of expenses to the variation of inflation. The loss of revenue impacts the primary result of public accounts, which takes into account revenues minus expenses, without the payment of interest. In this case, the table correction could be accommodated in the deficit target of R$ 170 billion this year (that is, in the amount of the deficit limit that the government can close the accounts in 2022).

“It is possible to correct the table for it to be valid in the same year. The legislation does not allow when the Income Tax law is changed to increase the tax and not to decrease it”, says lawyer Elisabeth Libertuci, specialist in IRPF legislation, partner at Lewandowski Libertuci. According to her, there is no restriction to adopt the measure in an election year.

IR reform

as showed the Estadão, Guedes prefers that the correction of the table be approved in the Income Tax reform bill, which is stationed in the Senate, after being approved by the deputies. He waved to support the approval of Refis for medium and large companies in case senators give approval for the IR reform.

In addition to providing for the return of taxation of profits and dividends at a rate of 15%, the project establishes the correction of the Individual Income Tax (IRPF) table and the increase in the exemption range from R$ 1.9 thousand to BRL 2.5 thousand. The project was approved by the Chamber in September of last year with 398 favorable votes, but it was put on hold by the Senate rapporteur, Senator Angelo Coronel (PSD-BA). At the end of the year, Coronel presented a separate project with only the correction of the IRPF table, much more generous than the government’s. Now, with the turn of the year, the rapporteur is signaling that he will resume the discussion.

lag

according to National Union of Tax Auditors (Sindifisco), considering the inflation accumulated since 1996 (measured by the IPCA), it was found that the lag in the table is 134.53%. For 2022 (withholdings being made monthly and annual returns delivered until April/2023), it is estimated that 8,207,412 taxpayers will be in the IRPF exemption range, without any correction to the table.

With the correction at 134.53%, the number of exempt would reach 23,506,672. That is, for the 2022 calendar year (declarations to be delivered in April/2023), 15,299,261 taxpayers, who could be in the exemption range, will bear the tax burden as a result of the non-correction. Sought, the Revenue said it does not comment on studies or standards that are not published.

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