Cost of BRL 8.2 billion to readjust the minimum wage and correct the IR table will be compensated, says secretary – 02/27/2023 – Market

The cost of the additional readjustment of the minimum wage and the update of the IRPF (Individual Income Tax) table, calculated at R$ 8.2 billion this year, will be compensated with the adoption of other measures to recompose the government’s cash, said this Monday (27) the secretary of the National Treasury, Rogério Ceron.

“These measures will be announced with your compensation measure,” said Ceron. He did not detail, however, which initiatives are being analyzed by the economic team.

The announcement of the additional readjustment of the minimum wage, from R$1,302 to R$1,320, and the update of the IRPF table was made by President Luiz Inácio Lula da Silva (PT) on February 16th.

According to Ceron, the change in the minimum wage has an impact of approximately R$5 billion. Because it is an increase in expenses, the compensation must be a cut in the same measure in another type of expense.

Government technicians hope that updating the records of the Auxílio Brasil program (which will once again be called Bolsa Família) will contribute to reducing expenses. Last week, the Ministry of Development and Social Assistance, Family and Fight against Hunger announced that it will cut at least 1.55 million irregular beneficiaries as early as March.

The correction of the table, in turn, generates a revenue waiver of around BRL 3.2 billion this year and around BRL 6 billion in 2024.

The Federal Revenue will extend the IRPF (Individual Income Tax) exemption to two minimum wages (R$ 2,640) as of May, but the scope of the benefit will be smaller for higher income workers.

According to the Revenue, the IRPF exemption range will be corrected from the current R$ 1,903.98 to R$ 2,112.

Additionally, a simplified monthly deduction in the amount of BRL 528 will be created, which will be automatically applied if it is beneficial to the taxpayer.

This fixed discount cannot be accumulated with other deductions, such as social security contributions, alimony and dependents. Whichever is more advantageous.

The secretary also said that the Desenrola program, to allow the renegotiation of family debts (especially those with lower incomes) under more advantageous conditions, is in the final phase of preparing the normative acts.

The design of the program provides for a guarantee fund, with public resources, to cover payments in case of default. With this, the expectation is to reduce the risk of banks and encourage them to offer cheaper types of credit to debtors.

“The search is to find space in existing funds, which already have unused balances, to be able to mitigate or fully cover the impact of the program”, said Ceron. “Eventually, the Treasury may need to complement this year or the next”, added the secretary, admitting the possibility of an additional contribution of funds to the guarantee fund.

According to him, the government is also monitoring the credit scenario in the country and discussing “possible needs for specific sectors, such as small and medium-sized companies”, but still without a decision.

Ceron held a press conference to announce the Treasury’s first result for 2023. The R$78.3 billion surplus in central government accounts means, in nominal terms, the best month of January in the entire historical series, which began in 1997 .

When data from previous years are corrected for inflation, the month of January 2023 is the second best in the series, behind the result for the month in 2022 (R$ 81.2 billion).

“The result observed in January 2023 is the best result ever observed in the entire historical series, corrected by the IPCA, for the first year of a new term”, says the Treasury.

Significant increases in revenue managed by the Federal Revenue and also in non-tax collection, such as dividends, contributed to the positive number in the first month of the year. The government’s net revenue had a real increase (inflation already discounted) of 2.4% compared to January 2022.

On Thursday (23), the Tax Authorities had already announced that collections totaled R$ 251.7 billion in January, a historic record in the series that started in 1995.

On the other hand, expenses had a real growth of 6.0%. The explanation, according to the Treasury, is the increase of R$ 3.8 billion in expenses with social security benefits and R$ 5.7 billion with Auxílio Brasil (which will once again be called Bolsa Família), compared to January. from 2022.

The primary result is obtained by the difference between government revenues and expenditures.

Despite the positive balance, Ceron stated that it is still a single month and attention must be paid to the accounts. The deficit actually foreseen in this year’s Budget is R$ 228.1 billion.

“There is still a mismatch between revenue projections and projected expenses”, said the secretary. The team led by the Minister of Finance, Fernando Haddad (PT), is trying to reduce the gap with a package of measures, mainly focused on revenue recovery.