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Total surprise, Brazilians who earn up to R$2,600 are back from Carnival with excellent news.

The federal government has announced changes to the schedule for imposing personal income tax (IRPF). About 13.7 million taxpayers will benefit from the update. In short, the number represents 42% from agents last year.

According to the information, the change should cost about R$3.2 billion to the public treasury in 2023. This is because the scope of the new exemption will include those earning up to R$2,640 as of May. In practice, the value is equivalent to a new minimum wage.

Remember that also in May, there is a promise that the national floor will rise from R$1302 to R$1320. Thus, in the income tax, two measures were taken, the increase from R$ 1903.98 to R$ 2112 in the scope of exemption, and the adoption of a deduction in the simplified form.

With this change, those who earn up to R$2,640 will not have to pay income tax because they will receive an automatic deduction of R$528 with reference to the simplified declaration. So the worker need not do anything, as the tax will be deducted from the source.

The new income tax schedule

Although the announcement has already been made, the changes will only be officially implemented through a temporary measure. Expanding the exemption would benefit all taxpayers, because the schedule is progressive.

Check out some examples in the table:

Monthly income simplified discount account basis the maximum tax
2640 Brazilian reals 528 Brazilian reals 2112 Brazilian reals Brazilian Real 0
2700 Brazilian reals 528 Brazilian reals 2172 Brazilian reals 4.50 Brazilian reals
3500 Brazilian Real 528 Brazilian reals 2972 Brazilian reals 75.40 Brazilian reals
5000 Brazilian Real 528 Brazilian reals 4472 Brazilian reals 354.47 Brazilian reals
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Optional discount

However, it should be noted that the changes announced by the government should make lower-paid workers realize the difference. According to federal revenue, those with incomes of up to R$2,640 will not receive deductions, in addition to not having to wait for next year to request a refund of what was deducted.

In addition, those who are entitled to a discount greater than R$528 will not be at a loss. The Ministry of Finance stated that the model was adopted to benefit those who earn less and to reduce the impact of the exemption. However, for this purpose, revenues must update their systems and inform companies that they should also be updated.

For all intents and purposes, Lula’s idea is to gradually expand the exemption up to R$5,000 during his tenure.

Income tax return

An income tax return must be submitted by the following taxpayers:

  • Those who have a taxable income of more than R$28,559.70 per year, or about R$2,380 per month, including salaries, pensions, pensions, and rent;
  • Those who have income-exempt, non-taxable, or exclusively taxable at source income above R$40,000; This includes FGTS (Self-Service Guarantee Fund), unemployment insurance, donations, inheritance and PLR;
  • who have capital gains for the sale of goods or rights subject to the payment of income tax;
  • who conducted stock exchange operations;
  • Who has assets or rights over R$300,000 on December 31, 2022;
  • Those whose income from rural activity is higher than R$142,798.50.