Government works to overthrow MP that exempts Brazilians from spending abroad – 02/12/2023 – Panel

The government of Luiz Inácio Lula da Silva (PT) works so that two MP’s (Provisional Measures) signed by former President Jair Bolsonaro (PL) lose their validity. The deadline for Congress to review them is March 1.

The first is MP 1,137/2022, which reduces the income tax of foreigners who invest in private securities in Brazil to zero. The exemption should reduce the country’s annual collection by R$ 450 million.

1,138/2022 initially reduces the income tax rate from 25% to 6% for expenses of Brazilians traveling abroad with a limit of R$ 20,000. From 2025% onwards, the rate would rise to 7% and gradually increase to 9% in 2027.

The Bolsonaro government did not disclose the financial impact of these measures at the time it was signed. He only justified that the implementation would be necessary to return to the level practiced in 2019, when Bolsonaro himself raised it.

The Minister of Tourism, Daniela Carneiro, is against the overthrow of the MP. But the government is trying to hold back to prevent the fiscal impact and will have a first test of its base in the Chamber of Deputies.

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