Wellton Máximo – Brazilian agency reporter, Brazil agency
The new government studies the increase in the income tax rate for the higher income Tax (IR) bands, said the special secretary of the IRS, Marcos Cintra. He did not detail how much the new rate would be or about which range would incid, but confirmed that the measure is under discussion by the economic team.
“The Brazilian tax system needs to have a certain progressiveness. We’re not going to the extreme of just having an aliquot. Few aliquots are absolutely adequate and an additional rate for high incomes, high incomes, “said the secretary, after the ceremony of the broadcast of the position to the Minister of Economics, Paulo Guedes.
The tax progressiveness is characterized by encating the richest and reducing the weight of taxes on the poorest. Currently, those who earn up to R $1,903.98 per month are exempt from the IR. Who gets from R $1,903.99 up to R $2,826.65 pays 7.5%. Those who win from R $2,826.66 to R $3,751.05 pay 15%. who receives from R $3,751.06 up to R $4,664.68 pays 22.5% and who receives above R $4,664.68 is taxed in 27.5%.
Rates
In addition to increasing the rate for the richest, Cintra said it is possible to reduce the IR to lower income people and extend the exemption range. He, however, stressed that the extent of the benefits will depend on the fiscal adjustment that the Government manages to implement, because the government’s cashier cannot be compromised.
In relation to the other taxes, Marcos Cintra admitted that he intends to create a single tax, provided that the measure stimulates the progressiveness of the tax system.
The secretary said that this tax may relate to financial transactions, similar to the former provisional contribution on financial Movement (CPMF), on the value added to a commodity at each stage of production and trade or on the Company turnover.
“We are still analyzing the various alternatives[para o imposto único]. We can work on a va[Imposto sobre Valor Agregado]t, we can work on a tax on financial movement, in a tax on invoicing. We have to make a stock complex. Before anything, it is important that we clean up our tax system, “Cintra said.
The secretary said the new government intends to reduce the tax burden, which closed 2017 in 32.4% of the gross domestic product (GDP, sum of the wealth produced in the country).
“We still analyze alternatives,” said the new secretary who, in addition to commanding the IRS, will prepare a proposal for tax reform. Before submitting the proposal, however, the Secretary stated that the Ministry of Economics will concentrate on simplifying taxation, taking advantage of the proposal prepared by the previous government to unify the SoCal Integration Program (PIS) and the contribution to the Social Security Financing (Cofins).
“The unification of taxes is a process that must occur in parall[à reforma tributária]el,” Cintra said.
