people who receive up to two minimum wages will be taxed again, understand

Understand why people with an income of up to two minimum wages will pay Income Tax (IR) again in 2024. Find out how the minimum wage adjustment impacts your taxation.

The recent controversy surrounding Income Tax in Brazil has generated heated discussions across the country.

The change that has been causing uproar concerns the taxation of people who receive up to two minimum wages.

Previously exempt, these taxpayers are now subject to paying tax. In this article, we will clarify the reasons behind this decision and analyze its impacts on the population.

Discover the reasons behind the controversy surrounding the taxation of those who earn two minimum wages. (Credit: @jeanedeoliveirafotografia / pronatec.pro.br).

The increase in the minimum wage and its implications for IR

The main reason for the resumption of income tax collection for those who earn up to two minimum wages is related to the adjustment of the national minimum wage.

In 2024, the value of the minimum wage became R$1,412, raising the income of this portion of the population to the second bracket of Income Tax.

Before this increase, the exemption range on the IR table was R$2,640, which allowed anyone earning two minimum wages to be free from taxation.

However, with the new minimum wage value, monthly income reaches R$2,824, exceeding the exemption limit.

According to Unafisco (National Association of Tax Auditors of the Federal Revenue of Brazil), taxpayers who benefited from the salary increase will now have to pay R$13.80 in tax each month, totaling R$165.59 per year .

What does the 2024 IR table look like?

In addition to the minimum wage adjustment, another issue that contributed to the resumption of taxation was the lack of correction in the Income Tax table.

At the turn of the year, an update should have been made, with at least a correction for the previous year’s inflation, which was 4.62%.

However, this correction did not occur, which increased the number of taxpayers required to pay tax.

Furthermore, it is important to highlight that the federal government, in 2023, promoted a change in the Income Tax exemption range through a Provisional Measure (MP).

The exemption range was increased from R$1,903.98 to R$2,112, including a monthly discount of R$528 at source. This exempted anyone earning up to R$2,640, equivalent to two minimum wages that year.

Promise not fulfilled by the Federal Government and current income brackets

It is important to mention that during the 2022 presidential campaign, the then candidate and current president, Lula, promised to exempt people who receive up to R$5,000 from income tax. However, this promise has not yet come to fruition.

The current income ranges and their respective rates are as follows:

Band 1: Up to R$ 2,112.00 – Exempt Band 2: From R$ 2,112.01 to R$ 2,826.65 – 7.5% Band 3: From R$ 2,826.66 to R$ 3,751.05 – 15% Band 4 : From R$3,751.06 to R$4,664.68 – 22.5%Range 5: Above R$4,664.68 – 27.5%

In addition, the installments to be deducted from Income Tax by salary range are as follows:

Band 1: R$ 0.00 (zero) Band 2: R$ 158.40 Band 3: R$ 370.40 Band 4: R$ 651.73 Band 5: R$ 884.96

Attempt to correct the table

Finally, the National Association of Federal Revenue Tax Auditors (Unafisco) highlights that more than 33 million people who receive up to R$4,942.29 per month would be exempt from IR in 2025 if the table were fully adjusted for inflation.

This would represent an increase of 13.6 million exempt people in relation to the current number, demonstrating the accumulated gap in the table.

The gap in the Income Tax table leads more people to contribute, even with reduced purchasing power due to inflation.

The result is an ever-increasing tax rate for taxpayers as their salaries increase, often just to compensate for inflation, while the Income Tax table remains unchanged.

In summary, the resumption of taxation for those earning up to two minimum wages is linked to the increase in the minimum wage and the lack of correction in the Income Tax table. This situation has generated debate and raised questions about tax justice in the country.

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