At a time when the federal government is ‘frantically’ seeking to increase revenues and contain expenses, under the allegation of ‘commitment to fiscal balance’, the public coffers are likely to suffer a drain of R$ 130.7 billion, corresponding to 13.1 million of taxpayers, due to the update of the Individual Income Tax table (IRPF), estimates the National Association of Tax Auditors of the Federal Revenue of Brazil (National Unafisco).
The billionaire tax waiver would be included in the most recent version of the government’s proposal, which consists of expanding the exemption range, from the current R$ 1,903.98 to R$ 2,604, that is, taxpayers who receive up to two minimum wages. The measure would be equivalent to a correction of 36.76% in the tax table, provided that the current rates of 7.5% to 27% are maintained.
By this calculation, the contingent of exempt people would jump from 8.4 million to 22 million people, while the collection would fall from R$ 395.64 billion to R$ 264.92 billion. In addition, the new ‘Leão’ billing method would increase the number of exempt people, but also the number of those who would pay a lower amount.
In any case, it is still not possible to assess the exact impact of the federal measure, not least because updating the table would only be valid after the approval of the tax reform by the National Congress, which would include the beginning of the collection of tax on dividends. If the Executive’s original proposal were maintained, of an exemption range of up to R$ 2,640, the loss of federal revenue would amount to R$ 108 billion in ten months, informs Unafisco.
Even representing a billionaire waiver, Federal Revenue auditors consider it ‘insufficient’, since the values in the IR table have not been corrected since 2015. For Unafisco, taking into account the accumulated inflation in recent years, the exemption should cover taxpayers with monthly income of up to R$ 4,723.78. During the election campaign, then-candidate Lula signaled the intention of, if elected, ‘gradually’ raising the exemption range, until it reached R$5,000.