*Brazil’s President Luiz Inácio Lula da Silva has signed a decree (‘medida provisória’, MP) that revises the brackets for income tax (IR) and mandates that taxpayers who earn up to R$3,036 (US$518) per month will be exempt from IR. According to a government press release, the reason for this revision of the IR tax brackets is due to the changes in the minimum wage, which has been set at R$1,518 per month for 2025. Now that the minimum wage has risen, the salary bands for IR rates have been adjusted to grant exemptions for people who earn up to twice the new minimum wage. This MP comes amid the Lula administration’s broader efforts to push for legislation to reduce the tax burden on lower earners and increase taxes on Brazil’s wealthiest citizens. Last month the government submitted a bill to congress which proposes granting IR exemptions for everyone who earns up to R$5,000 per month. This income tax bill is expected to be one of Lula’s main legislative priorities in 2025.
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