Lula sanctions minimum wage of R$ 1,320 and presents MP from Offshores

President Luiz Inácio Lula da Silva (PT) sanctioned, this Monday (28), Provisional Measure 1,172/23, which readjusts the minimum wage and expands the range of exemptions from the Income Tax table. The text, approved by the National Congress, establishes an appreciation policy through real increases, linked to economic growth and inflation.

With the approval of the proposal, the minimum wage of R$ 1,302 will increase to R$ 1,320 as of January 1, 2024. The new law also establishes the readjustment of the Individual Income Tax (IRPF) exemption range, which will be exempt for those who earn up to two monthly minimum wages (R$ 2,640). Currently, exemption is possible for those who earn up to R$ 1,903.

Regarding the correction of the Income Tax table, the Minister of Finance, Fernando Haddad, said that it is important to achieve “social justice”. “We know that this distortion of the tax system will only be corrected by tax reform,” he said.

In addition to sanctioning the new minimum wage, Lula also signed an act creating the interministerial working group on labor relations within the federal public administration.

MP from the Offshores or “super rich”

Taxation on income from investments abroad, trust or offshore funds, which was excluded from the text by means of a highlight in plenary, will now be discussed in a new Provisional Measure, presented by the government this Monday (28).

At the ceremony at the Planalto Palace, Haddad said that the measures to tax the so-called “super-rich” are not a “Robin Hood action”. According to him, the reference for the measures are the member countries of the Organization for Economic Cooperation and Development (OECD) and Europe, in addition to more developed neighbors, such as Chile and Colombia, and the United States.

“Often I see this being treated in the press as some kind of ‘Robin Hood action’, a rematch, and it’s not like that at all. It’s absolutely none of that. What we are taking to Congress for consideration is to bring our tax system closer to the most advanced in the world”, said Haddad.

According to the minister, the proposal signed by the government and forwarded to the National Congress has the potential to collect around BRL 7.05 billion in 2024, close to BRL 6.75 billion in 2025 and BRL 7.13 billion in 2026. The measure is one of Haddad’s bets to help with the goal of zeroing in on the deficit next year.

The text also establishes that anyone with income abroad of up to R$ 6,000 will not be taxed. However, the Treasury reinforced that income between BRL 6 thousand and BRL 50 thousand per year, in turn, will be subject to taxation at the rate of 15%, while income above the threshold of BRL 50 thousand will be subject to the rate of 22.5%.