Haddad points out that income tax reform…

Finance Minister Fernando Haddad said the income tax reform draft should not be sent to the national conference this year. According to him, the legislative calendar is tight and there are unfinished tasks – such as organizing consumption tax reform. The Minister indicated that the studies carried out by the Treasury are still in the preliminary stage.

In this proposal, the government should consider increasing the scope of income tax exemption for those who receive up to R$5,000 per month, one of the election promises of President Luiz Inacio Lula da Silva. “There is work to be done and we want to do it right. “We want, from a consumption and income point of view, to bring Brazil closer to the best in the world, looking at the OECD in general and looking at our peers,” he announced during the Itaú BBA event. According to the Minister, Finance studies focus on neutral reform in terms of revenues and expenditures.

Last week, the minister was with Lula and presented four possible income reform scenarios. According to him, these studies will not be ready within “a few weeks.” He said: “At the present time, we are presenting all possible technical alternatives to the President of the Republic and the team of ministers.” One of the scenarios presented to the President was to increase the scope of tax exemption and minimum taxes for people receiving more than R$ 1 million per year to compensate for the tax exemption.

Haddad said that he is “opening the calculations” to find out the amount of tax exemption with income deductions such as health and education, and what economic classes are preferred with the procedure to assess whether there is “tax justice.”