Government publishes provisional measure that updates IR exemption up to two minimum wages

The federal government published this Tuesday (6) the provisional measure that makes official the exemption from Income Tax for workers who earn up to two minimum wages, that is, up to R$2,824 per month. The measure, published in an extra edition of the Official Gazette of the Union (DOU) and will benefit 15.8 million people.

Previously, the exemption ceiling was R$2,640, corresponding to two minimum wages last year. With the increase in the minimum wage to R$1,412 this year, anyone who received less than two minimum wages would be subject to paying the tax.

The incidence of Income Tax above this value will be progressive, reaching R$662.77 with the simplified discount for earnings between R$3,751.06 and R$4,664.68.

President Luiz Inácio Lula da Silva (PT) had promised in January to review the Income Tax table to include workers who receive up to R$2,824 in the exemption range. He even informed Finance Minister Fernando Haddad of the need to update the table.

“Haddad knows we have to make these adjustments. They’re hard because we need to know [que]when we give up some money, we have to know where we are going to get the other money from”, he said at the end of January.

According to the ministry, workers in this salary range will benefit from a simplified discount of R$564.80, with this discount being optional. The MP will be forwarded to the National Congress for analysis within 120 days.

The ministry also stated that the change in the exemption range is in accordance with the Budgetary Guidelines and Fiscal Responsibility laws, with an estimated impact of a reduction in revenue of R$3 billion for 2024.