{"id":93368,"date":"2025-03-20T12:14:13","date_gmt":"2025-03-20T15:14:13","guid":{"rendered":"https:\/\/murray.adv.br\/?p=93368"},"modified":"2025-03-20T12:14:14","modified_gmt":"2025-03-20T15:14:14","slug":"income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/","title":{"rendered":"Income tax exemption up to R$5,000 fuels progressive taxation debate"},"content":{"rendered":"\n
Increasing taxation on high income does not ensure a change in the tax model, experts say<\/strong><\/em><\/h6>\n\n\n\n

<\/p>\n\n\n\n

<\/p>\n\n\n\n

<\/p>\n\n\n\n

<\/p>\n\n\n\n

<\/p>\n\n\n\n

03\/20\/2025 <\/p>\n\n\n\n

\n\n\n\n

The proposal announced by the Lula administration to reform income tax<\/a>, affecting both those earning up to R$5,000 and high-income taxpayers, places Brazil at the heart of a debate that has gained momentum in recent years.<\/p>\n\n\n\n

The discussion revolves around adopting progressive taxation where wealthier individuals pay proportionally more taxes than those with lower incomes<\/a>. Once primarily advocated by inequality scholars, the idea of increasing taxes for those at the top of the income pyramid has now crossed borders, experts say.<\/p>\n\n\n\n

The scale of income disparities became clearer through the research of French economist Thomas Piketty, using income tax data in his book \u201cCapital in the Twenty-First Century,\u201d which has helped draw more attention to the issue, according to Marcelo Neri, director of the Center for Social Policies at the Funda\u00e7\u00e3o Getulio Vargas (FGV Social).<\/p>\n\n\n\n

Even among higher-income individuals, the idea seems more acceptable than in the past, according to tax experts. That is partly because the proposed 10% minimum effective tax rate on dividends is below the previously considered 20% rate.<\/p>\n\n\n\n

However, greater attention in public debate does not guarantee changes in the country\u2019s tax structure. Economists and lawyers foresee intense battles to modify and limit the proposal, not ruling out the possibility of a total standoff in Congress. Questions about the efficiency of public spending could add renewed pressure to these negotiations, they point out.<\/p>\n\n\n\n

\u201cOver the past decade, the way inequality is perceived has changed. With Piketty\u2019s studies, we can better see income disparities and the top of the income distribution. The inequalities are even greater than anticipated,\u201d Mr. Neri said.<\/p>\n\n\n\n

In 2020, the taxation of large fortunes was included in the final document of the G20 Summit under Brazil\u2019s presidency of the group. Luiza Nassif Pires, co-director of the Center for Research in Macro-Economics of Inequality (MADE\/USP) and professor at the Institute of Economics at UNICAMP said the Brazilian government\u2019s announcement focuses on a specific issue\u2014alterations in income tax rather than overall wealth.<\/p>\n\n\n\n

\u201cThis announcement involves a tax on income, slightly different from a tax on wealth. It makes sense domestically, doesn\u2019t require global coordination, and aligns with what other countries are already doing. The proposal simply attempts to reverse the regressivity of Brazil\u2019s tax system.\u201d<\/p>\n\n\n\n

The public debate is further reinforced by the support of liberals like former Central Bank president Arminio Fraga and contributions from individuals like Neca Setubal, heir to Ita\u00fa with a life dedicated to social causes, and Elie Horn, founder of Cyrela and one of two South American participants in Giving Pledge, a commitment to donate at least half of one\u2019s fortune.<\/p>\n\n\n\n

\u201cThe perception is that sentiment has changed. A year ago, a tax for high-income earners reaching Congress was unimaginable. Today, the idea seems more acceptable. However, many high-income individuals believe they are already taxed on these dividends. This sentiment will resonate in Congress, with lawmakers facing pressure,\u201d says a tax attorney from a nationally operating firm.<\/p>\n\n\n\n

Despite the broader debate on inequality and the celebration of the government\u2019s proposal, Marcelo Neri admits he is \u201cnot particularly optimistic\u201d about its progress through Congress and foresees \u201ca long road ahead\u201d:<\/p>\n\n\n\n

\u201cIt is not a consensus agenda. Brazilian society has become accustomed to higher levels of inequality. The initial reaction was positive, but I don\u2019t see it as an easy task. There is greater awareness of inequality, but the pendulum can swing when we look at the international landscape.\u201d<\/p>\n\n\n\n

Resistance in the legislative debate is also expected by Ms. Pires, given the history of easier approvals for tax deductions than for tax increases.<\/p>\n\n\n\n

\u201cTaxation should be understood as part of a social pact and not just as a tax burden. Decisions not to pay taxes have very high costs as well,\u201d she pointed out, emphasizing the importance of maintaining the government\u2019s revenue-generating capacity and the social commitments established by the Brazilian Constitution, such as public education and healthcare.<\/p>\n\n\n\n

Research by MADE\/USP reveals income tax exemption for those earning up to R$5,000 is unlikely to affect inequality because it targets a segment of the population not at the bottom of the income pyramid. Under the 2025 Income Tax table, these individuals would have a monthly income of up to R$2,824.<\/p>\n\n\n\n

\u201cA large portion of the population falls within the income range of two times the minimum wage and is exempt from income tax. The current measure targets the middle of the income range. Therefore, to have an impact on inequality, it must be paired with high-income taxation,\u201d says the co-director of MADE\/USP.<\/p>\n\n\n\n

Visiting professor at FGV Law Rio, tax attorney Gabriel Quintanilha questions the choice of the R$50,000 per month threshold to define the high-income population. With an exemption for those earning up to R$5,000, he sees a small gap between the two income levels.<\/p>\n\n\n\n

Moreover, he argues that the government\u2019s proposal is \u201ca small patch\u201d in a tax system that requires a comprehensive update. \u201cI\u2019m not against taxing high incomes, but a broader reform of income taxation, for both corporations and individuals, should be discussed.\u201d<\/p>\n\n\n\n

Gustavo Carmona, leader of international taxes at EY Brasil, perceives a lack of clarity in areas such as non-resident investors: \u201cThere is an expectation of credit between what has been withheld and the 34% rate, but it doesn\u2019t specify how this credit will be constituted. Non-resident investors cannot file a compensation report.\u201d<\/p>\n\n\n\n

*By\u00a0Lucianne Carneiro\u00a0\u2014 Rio de Janeiro<\/p>\n\n\n\n

Source: Valor International<\/p>\n\n\n\n

\nhttps:\/\/valorinternational.globo.com\/\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"

Increasing taxation on high income does not ensure a change in the tax model, experts say 03\/20\/2025 The proposal announced by the Lula administration to reform income tax, affecting both those earning up to R$5,000 and high-income taxpayers, places Brazil at the heart of a debate that has gained momentum in recent years. The discussion revolves […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[25969,25970],"class_list":["post-93368","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-income-tax-exemption","tag-up-to-r5-000"],"yoast_head":"\nIncome tax exemption up to R$5,000 fuels progressive taxation debate - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Income tax exemption up to R$5,000 fuels progressive taxation debate - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"Increasing taxation on high income does not ensure a change in the tax model, experts say 03\/20\/2025 The proposal announced by the Lula administration to reform income tax, affecting both those earning up to R$5,000 and high-income taxpayers, places Brazil at the heart of a debate that has gained momentum in recent years. The discussion revolves […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/\" \/>\n<meta property=\"og:site_name\" content=\"Murray Advogados\" \/>\n<meta property=\"article:published_time\" content=\"2025-03-20T15:14:13+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-03-20T15:14:14+00:00\" \/>\n<meta name=\"author\" content=\"Gelcy Bueno\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Gelcy Bueno\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/\"},\"author\":{\"name\":\"Gelcy Bueno\",\"@id\":\"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e\"},\"headline\":\"Income tax exemption up to R$5,000 fuels progressive taxation debate\",\"datePublished\":\"2025-03-20T15:14:13+00:00\",\"dateModified\":\"2025-03-20T15:14:14+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/\"},\"wordCount\":939,\"keywords\":[\"Income tax exemption\",\"up to R$5.000\"],\"articleSection\":[\"Murray News\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/\",\"url\":\"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/\",\"name\":\"Income tax exemption up to R$5,000 fuels progressive taxation debate - Murray Advogados\",\"isPartOf\":{\"@id\":\"https:\/\/murray.adv.br\/en\/#website\"},\"datePublished\":\"2025-03-20T15:14:13+00:00\",\"dateModified\":\"2025-03-20T15:14:14+00:00\",\"author\":{\"@id\":\"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e\"},\"breadcrumb\":{\"@id\":\"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"In\u00edcio\",\"item\":\"https:\/\/murray.adv.br\/en\/home\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Income tax exemption up to R$5,000 fuels progressive taxation debate\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/murray.adv.br\/en\/#website\",\"url\":\"https:\/\/murray.adv.br\/en\/\",\"name\":\"Murray Advogados\",\"description\":\"PLG International Lawyers\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/murray.adv.br\/en\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e\",\"name\":\"Gelcy Bueno\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/murray.adv.br\/en\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/1ef2acfe966d6deacdeccd2a24ea89192c41fd05fc60e57b79021358a47f5641?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/1ef2acfe966d6deacdeccd2a24ea89192c41fd05fc60e57b79021358a47f5641?s=96&d=mm&r=g\",\"caption\":\"Gelcy Bueno\"},\"url\":\"https:\/\/murray.adv.br\/en\/author\/news\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Income tax exemption up to R$5,000 fuels progressive taxation debate - Murray Advogados","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/","og_locale":"en_US","og_type":"article","og_title":"Income tax exemption up to R$5,000 fuels progressive taxation debate - Murray Advogados","og_description":"Increasing taxation on high income does not ensure a change in the tax model, experts say 03\/20\/2025 The proposal announced by the Lula administration to reform income tax, affecting both those earning up to R$5,000 and high-income taxpayers, places Brazil at the heart of a debate that has gained momentum in recent years. The discussion revolves […]","og_url":"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/","og_site_name":"Murray Advogados","article_published_time":"2025-03-20T15:14:13+00:00","article_modified_time":"2025-03-20T15:14:14+00:00","author":"Gelcy Bueno","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Gelcy Bueno","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/#article","isPartOf":{"@id":"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/"},"author":{"name":"Gelcy Bueno","@id":"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e"},"headline":"Income tax exemption up to R$5,000 fuels progressive taxation debate","datePublished":"2025-03-20T15:14:13+00:00","dateModified":"2025-03-20T15:14:14+00:00","mainEntityOfPage":{"@id":"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/"},"wordCount":939,"keywords":["Income tax exemption","up to R$5.000"],"articleSection":["Murray News"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/","url":"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/","name":"Income tax exemption up to R$5,000 fuels progressive taxation debate - Murray Advogados","isPartOf":{"@id":"https:\/\/murray.adv.br\/en\/#website"},"datePublished":"2025-03-20T15:14:13+00:00","dateModified":"2025-03-20T15:14:14+00:00","author":{"@id":"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e"},"breadcrumb":{"@id":"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/murray.adv.br\/en\/income-tax-exemption-up-to-r5000-fuels-progressive-taxation-debate\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"In\u00edcio","item":"https:\/\/murray.adv.br\/en\/home\/"},{"@type":"ListItem","position":2,"name":"Income tax exemption up to R$5,000 fuels progressive taxation debate"}]},{"@type":"WebSite","@id":"https:\/\/murray.adv.br\/en\/#website","url":"https:\/\/murray.adv.br\/en\/","name":"Murray Advogados","description":"PLG International Lawyers","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/murray.adv.br\/en\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e","name":"Gelcy Bueno","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/murray.adv.br\/en\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/1ef2acfe966d6deacdeccd2a24ea89192c41fd05fc60e57b79021358a47f5641?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/1ef2acfe966d6deacdeccd2a24ea89192c41fd05fc60e57b79021358a47f5641?s=96&d=mm&r=g","caption":"Gelcy Bueno"},"url":"https:\/\/murray.adv.br\/en\/author\/news\/"}]}},"_links":{"self":[{"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/posts\/93368","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/comments?post=93368"}],"version-history":[{"count":1,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/posts\/93368\/revisions"}],"predecessor-version":[{"id":93369,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/posts\/93368\/revisions\/93369"}],"wp:attachment":[{"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/media?parent=93368"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/categories?post=93368"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/tags?post=93368"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}