Overview

• Lawmakers voted unanimously to lift the monthly exemption from R$3,036 to R$5,000, with the opposition PL backing the measure despite objections to higher taxes on the wealthy.
• The government projects that nearly 16 million Brazilians would benefit in 2026 if the proposal becomes law.
• Relator Arthur Lira kept the R$5,000 threshold and expanded a tapered discount band to R$5,001–R$7,350, revising the formula to contain fiscal impact.
• Federal revenue losses are estimated at R$31.3 billion in 2026, rising in subsequent years, while offsets include a minimum tax on incomes above R$600,000 per year and taxation of dividends abroad expected to raise R$34.1 billion in 2026.
• Lira rejected automatic inflation indexation but required the executive to propose a national table-update policy within a year, and reporting notes resistance from investors.