Brazil Unveils New Tax Plan: Aiming for Fiscal Balance and Justice

The Brazilian government has proposed a plan to exempt individuals earning up to 5,000 reais per month from income tax. This initiative, described as fiscally balanced, will be funded by new taxes on the wealthy and overseas profits, aiming to promote tax justice.

On Tuesday, Brazil's government revealed a long-anticipated plan to waive income tax for individuals earning up to 5,000 reais (approximately $881.27) per month. The anticipated revenue shortfall is expected to be bridged by implementing new taxes on high-income individuals, as well as on profits and dividends sent outside the country.

Finance Minister Fernando Haddad asserted that the legislation, which is balanced in fiscal terms, aims to achieve tax justice. The government led by President Luiz Inacio Lula da Silva has continually emphasized that this proposal, crucial for bolstering the leftist leader's waning approval ratings, will remain fiscally neutral.

Currently, tax exemptions apply to those earning up to 2,824 reais monthly. The proposed adjustments represent a significant shift in Brazil's tax policy, aligning with President Lula's broader economic agenda and commitment to addressing economic inequality.

(With inputs from agencies.)