Overview

• The report by Arthur Lira grants full exemption for monthly incomes up to R$5,000 and a partial break up to R$7,350, with estimates of 10–16 million beneficiaries starting in 2026.
• The annual revenue impact of roughly R$25–27 billion would be offset by a progressive levy on very high incomes, taxing earnings above R$600,000 and reaching a 10% minimum rate above R$1.2 million, with dividends distributed through December 2025 excluded.
• Opposition lawmakers are preparing floor amendments, including a push to delay the compensation mechanism to 2027 or to expand the exemption threshold to R$10,000.
• If approved by the Chamber, the bill proceeds to the Senate, where the CAE has advanced a parallel proposal with similar thresholds, with leaders targeting final rules by December 31 for application in 2026 filings.
• Haddad reiterated commitment to fiscal targets and described the income tax package as a move toward greater tax fairness that raises take-home pay for workers while increasing the burden on the top of the distribution.