Brazil’s tax system deepens inequality, Oxfam says

In a report released Thursday (10), the organization outlines proposals to make Brazil’s tax system more progressive and less unequal. It recommends, among other measures, that the bill include mechanisms for assessing its impact on promoting racial and gender equality across different social groups. “Without considering race and gender markers in tax policies, there’s no way to evaluate whether we’re truly making progress,” said Carolina Gonçalves, coordinator of social and economic justice at Oxfam Brasil.

The report highlights the concentration of income in Brazil and notes that, according to the government, the expanded exemption would benefit 10 million people, financed by just 141,000 individuals who make more than R$50,000 per month and would be subject to a minimum 10% tax rate. “In other words, 0.13% of all taxpayers in the country can bear the cost of exempting 10 million people,” the document said.

For Ms. Gonçalves, in a country with a historically regressive tax structure—in which the tax burden decreases as income rises—tax injustice cannot be separated from racial inequality. “This structure perpetuates and deepens inequality,” she said.

An analysis of 2024 household survey data (Pnad) by Oxfam Brasil found that among individuals earning R$3,000 to R$7,000 per month—the group that stands to benefit from the proposal—59% are men and 41% women. Racially, 55% are white and 44% are Black or mixed race. Among the wealthiest 0.1% of Brazilians, who earn an average annual income of R$6 million, only 19% are women and 20% are Black or mixed race.

“The top of Brazil’s economic pyramid is overwhelmingly made up of white men. That’s no accident,” Ms. Gonçalves said.

Luiza Nassif Pires, a professor at the University of Campinas (Unicamp), warned that macroeconomic policies that fail to address inequality and its dimensions—such as race and gender—risk deepening it. “So any reform to promote tax justice must be sensitive to race and gender,” she said. Her research, she noted, shows that the current income tax system disproportionately benefits white individuals. Ms. Pires also co-directs the Center for Research on Inequality and Macroeconomics at the University of São Paulo’s School of Economics and Business (Made-FEA/USP).

Economist Nathalie Beghin, a board member at the Institute for Socioeconomic Studies (INESC), argued that so-called “neutral” approaches are not enough to fix the structural inequality embedded in Brazil’s tax system.

“That’s why affirmative measures are necessary—such as the cashback mechanism approved in the recent tax reform, which allows part of the tax burden to be refunded to lower-income households, or income tax exemptions for the poor,” she said, referring to the proposal in Bill 1087/2025, which is currently under review in the Lower House.