Planalto Sets Nov. 26 Signing for Income Tax Exemption Up to R$5,000

Overview

• The signed law would zero IR for monthly incomes up to R$5,000 and apply a tapering discount for earnings from R$5,000.01 to R$7,350.
• The Planalto scheduled a sanction ceremony for Wednesday at 10:30 a.m., with congressional leaders expected to be invited.
• Roughly 16 million taxpayers are projected to benefit, with no table changes for those earning above R$7,350.
• Government estimates cite a R$31.2 billion revenue loss in 2026, while a separate projection puts the three‑year cost at R$100.7 billion.
• Offsets in the bill include a progressive minimum tax for individuals earning above R$50,000 per month, a 10% withholding on dividends above R$50,000 per month domestically, and a 10% tax on any dividend remittances abroad, plus automatic FPE/FPM transfers to shield states and municipalities.