Economy defends not readjusting the IR table

by

The Ministry of Economy team defends not to readjust the IRPF (Individual Income Tax) table, according to two government members consulted by leaf. The understanding is that the measure will have a fiscal impact when the political class advances on the Budget in search of more expenses.

In addition, Minister Paulo Guedes’ team will take a stand against the bill presented this week in Congress by Senator Angelo Coronel (PSD-BA), which would correct the table and raise the exemption ceiling for those earning up to R$ 3,300 per month (today, the limit is R$1,903.98).

In his proposal, Coronel also ends one of the IRPF collection ranges, which provides for a 7.5% rate. In the other ranges, there would be readjustments from 13.3% to 73.3%.

The waiver is estimated at R$35 billion. But, according to the senator, the Economic Policy Secretariat of the Ministry of Economy has already pointed out that the economic recovery and inflation will promote a structural growth in income tax collection of R$ 60 billion annually.

In practice, the correction of the table reduces the payment of taxes by the population and, therefore, reduces the collection for the public coffers.

In the current understanding of the Ministry of Economy, the correction made by the government should be the one that was included in the bill presented in June to change the Income Tax rules. The bill was put on the fridge by the senator, who was the draftsman of the text.

The program defended by the government promoted a milder readjustment than the senator’s text and also contained measures that generated revenue, such as the beginning of taxation on dividends (a portion of the profit paid by companies to their owners or shareholders).

Amidst the difficulties with the progress of the tax reform, the economic team even considered a correction of the table by means of an MP (Provisional Measure), which would legally be possible – but the idea did not go ahead. The view now is that the table should not be patched separately.

Lag affects lower-income taxpayers and generates BRL 149 billion for the government

as showed the leaf this week, the accumulated gap in the table exceeds 130% and will lead taxpayers to pay BRL 149 billion more than would have been due if the table had been fully readjusted for inflation since 1996.

It was in the second year of the Fernando Henrique Cardoso (PSDB) government that the annual update was no longer carried out and became sporadic, according to the wishes of each ruler.

From the tucana administration onwards, the correction began to be carried out in an inconstant manner, as in 2002 and, in the PT governments, between 2005 and 2015 —the last year in which there was a readjustment.

Unafisco (National Association of Tax Auditors of the Federal Revenue) says that the lag in the table will affect in particular 15.1 million people with lower income in 2022. This portion of the population could be exempt from taxation if the salary range had been updated fully.

The president of Unafisco, Mauro Silva, says that the lack of updating means higher taxes and that president Jair Bolsonaro is breaking a campaign promise. As a candidate, the president promised to raise the exemption for everyone who earns R$5,000 a month.

“When he takes office in 2019, he already had to edit an MP with the 2018 inflation and every year he should do the same thing,” he said. “Didn’t do it.”

.

You May Also Like

Recommended for you

Immediate Peak