Retirees and workers start 2023 paying more income tax for the 27th year in a row

Brazilians start another year paying more IR (Income Tax) due to lack of readjustment in the table used to calculate discounts on wages and pensions.

The last full readjustment of the table that determines the exemption range and rates was made in 1996. As a result, retirees and workers pay a disproportionate percentage of the annual salary replacement, harming the real increase in income, according to specialists.

Since 1996, the table has undergone updates, the last being in 2015 during the second government of then-president Dilma Rousseff (PT). Even so, there was no complete replacement and the accumulated gap is 145.56%, estimates an October survey by Unafisco Nacional (National Association of Tax Auditors of the Federal Revenue Service of Brazil).

The entity’s projection is that the Union collects, in 2023, more than R$ 320 billion with the IR, of which R$ 190 billion would be undue. “Who pays are the wage earners who have only the replacement of inflation in their salaries and pay more income tax year after year. These are resources that should be in the hands of families and are not”, says Mauro Silva, president of Unafisco Nacional.

Currently, those who receive up to R$ 1,903.98 per month are exempt from Income Tax. If the table were fully corrected, taxpayers with salaries of up to R$ 4,675.38 would not need to pay these taxes. Thus, the number of exempt would go from 7,948,772 to 24,542,434, representing a reduction of at least R$ 186.8 thousand in the collection, according to the entity.

campaign promise

The full correction of the IR table was a campaign promise by Jair Bolsonaro (PL) in 2018. In June 2021, the government sent a proposal, as part of the tax reform, to Congress. The Chamber of Deputies approved the text, which did not advance in the Senate. In the last four years alone, the gap estimated by Unafisco Nacional is 30.35%.

One of the promises of President Luís Inácio Lula da Silva (PT) is the exemption for those who receive up to R$ 5,000. Although there was an expectation that the adjustment would be included in the PEC (Proposed Amendment to the Constitution) of the Transition, the Minister of Development and Social Assistance, Family and Fight against Hunger, Wellington Dias (PT), coordinator of the party in the negotiations of the Budget of 2023 during the transitional government, stated that it is a goal “for term”.

Although the elected government has not signaled what are the plans to correct the table, the expectation is that the process will be gradual, with annual changes. Theoretically, by raising the exemption value, there could be a proportional impact on the other ranges. However, without a signal from the next government, it is not possible to determine which criteria will be used.

In Silva’s assessment, this is not a tax waiver, since the amount is improperly collected. Even so, the value from the IR is already foreseen in next year’s Budget. Correction in full and at once would require a very large fiscal effort, which reinforces the thesis that the changes will be gradual and not immediate.

“We hope that even in the first year of his term, the Lula government already assumes some emergency recomposition or correction so that people have some relief. years”, says the president of Unafisco Nacional.

If the new government corrected the table according to the inflation of the last four years (30.35%), 13,516,492 retirees, pensioners and workers earning up to R$ 2,481.80 would remain without paying the IR.