Individual income tax exemption may not be available to workers who earn minimum wage and one-and-a-half. A minimum wage increase of 82 reais has been approved by the National Congress as a result of the Budget Guidelines Act 2023.
In the current Brazilian system, the minimum wage and a half is equal to 1,818 Brazilian Real (1212 Brazilian Real + 606 Brazilian Real). The recipient is exempt from paying taxes on this amount. For minimum wage and half, if the value increases next year, it would be R1,941, which is taxable. The monthly deductions for the worker’s salary will be 2.77 BRL.
Uncorrected infrared table
A resource exemption of up to R$1,903 is provided by the IRPF schedule, which has not been corrected since 2015. During the same year, the last review, the state’s minimum wage was R$788, and anyone who earned more than 2.4 minimum wage per month was required to pay tax.
While Congress approved LDO, the Ministry of Economy reports that the national floor could rise even higher in 2023, with values as high as R1,310. For those earning one and a half minimum wages, if the IRPF schedule remains unchanged, they will be required to pay R$4.57 in tax.
Brazilians should not be required to pay IRPF
It is estimated that 15.3 million Brazilians should not have paid IRPF 2022, based on a study conducted by Unafisco Nacional. The tax schedule could have been avoided if it had been accumulating since 1996 as a result of inflation.
Citizens receiving up to R$4,400 per month should be included in the exemption, according to the entity. This amount is not in conflict with the current value of R$903.98. In fact, millions of Brazilians have already paid R$164.5 billion in this year alone without using corrections.
Increasing taxes on large fortunes, dividends, and dividends would provide the same amount of revenue, according to Unafisco.