On Sunday evening (11/30), President Luiz Inacio Lula da Silva (PT) made a statement broadcast on national radio and television. During the speech, the president criticized the “privileges” of the Brazilian elite, defended taxes on the wealthy and praised income tax relief for those earning up to R$5,000.
In his speech, Lula said that the IR exemption would generate a kind of “fourteenth salary” and also stated that the compensation would be paid by taxing those who earn more than R$1 million per year.
He said: “We are talking about 0.1% of the population. People who earn 10, 20 or 100 times more than 99% of the Brazilian people, who will contribute a 10% income tax, to provide relief to the families who work, fight and move this country. 140,000 super-rich people pay a little more until millions of Brazilians stop paying.”
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The president criticized the “privileges” of the elite. “Over the course of 500 years of history, the Brazilian elite has accumulated more and more privileges, passed down from generation to generation, until it has reached the present day. Among the many privileges, perhaps the most shameful is paying an income tax lower than that paid by the middle class and workers.”
He added: “Those who live in a mansion, have money abroad, collect imported cars, private jets and jet skis, pay ten times less than a teacher, a police officer or a nurse.”
Lula said the law dealing with the tax changes will come into effect on January 1, 2026. “If you earn up to R$5,000 per month, December will be the last month in which you will receive an income tax deduction on your salary.”
Injection into the economy
According to the president, the Federal Revenue Agency calculated that the income tax exemption for those earning up to R$5,000 would “inject R$28 billion into the economy.”
Details of the statement were earlier expected by writer Igor Gadelha from Capitals.
“From January next year, what is currently considered a deduction on your salary becomes extra money in your pocket. To travel with your family, to eat what you like best, to buy Christmas presents for your children, to pay off debt, to offer a premium. To buy a bigger screen TV to watch next year’s World Cup. This income tax relief means more money in your pocket, which means more purchasing power, which means an increase in consumption, which makes the wheels of the economy turn.”