Overview

• The PAN initiative was presented in the Chamber of Deputies on October 1 and was turned to committees for analysis.
• The draft would amend the Income Tax Law, the Federal Labor Law, and the law governing federal public servants to make the aguinaldo tax-exempt for private and public employees.
• Employers would no longer be required to withhold income tax on the year-end bonus under the proposal.
• Backers argue the measure would spur December spending and partially offset lost revenue through higher VAT receipts, citing surveys that many workers use the bonus to pay debts or save.
• Supporters point to precedents in Peru and Brazil, while a separate Movimiento Ciudadano bill also seeks full exemption and is pending in committee.