Brazil’s Lula sanctions an increase in tax exemptions for low-income people

RIO DE JANEIRO AP Brazilian President Luiz In cio Lula da Silva on Wednesday sanctioned a bill that exempts people earning up to reais a month from income taxes more than doubling the current exemption and meeting a key priority of his poll campaign A promise made a promise kept Lula explained on X on Wednesday The measure which will come into effect next year also establishes tax discounts for incomes up to reais Particular million Brazilians will benefit from the new law according to the presidential palace Approximately million will no longer pay income tax while million will benefit from a reduction To offset the loss of state revenue the regime will introduce a minimum effective tax rate for high-income individuals The new minimum effective tax would apply to people who earn over reais approximately a year ramping up from zero to for those who earn over reais selected annually The new law will target specific wealthy individuals in the country who on average at this time pay an effective tax rate of according to Brazil s Finance Ministry Certain of the country s population earned less than reais in when considering household income per capita according to Brazil s national statistics agency IGBE The bill passed the House and the Senate unanimously reflecting the broad constituents backing for the tax exemption The adoption of the bill is a political win for Lula who will run for a fourth term next year Both Lula and Bolsonaro pledged to at least double the income tax exemption during the hotly contested voting process which Lula narrowly won Bolsonaro had also committed to the amendment when campaigning in to no avail Lula had been facing plummeting popularity but he recovered as an unintended effect of U S President Donald Trump s politically-motivated tariff on a range of Brazilian imports The U S has since revoked countless of those tariffs Source