The Chamber of Deputies approves the urgent status of a bill that extends income tax exemption to those earning R$5,000.

The Chamber of Deputies approved, this Thursday, the 21st, the urgent status of the bill that extends the income tax exemption to those who earn up to R$5,000 per month. The measure accelerates the bill's processing, with the exemption expected to take effect as early as 2026 .

According to the text, the full exemption will benefit approximately 10 million people. Furthermore, those earning between R$5,000 and R$7,350 will receive a gradual income tax deduction, the smaller the closer to the ceiling. The intermediate bracket could benefit up to 500,000 taxpayers.

To compensate for the reduction in revenue, the project establishes higher rates for the wealthiest: income tax will begin to be charged on those earning over R$600,000 per year, reaching 10% for incomes above R$1.2 million/year , impacting around 141,000 people.

The bill also creates a 10% withholding tax on profits and dividends over R$50,000 per month paid by the same company, although other measures aimed at the super-rich have been omitted. The government estimates that the new tax will raise R$34 billion per year, enough to cover the estimated R$25.8 billion loss from the exemption and discounts.

With the approval of the urgency, Arthur Lira 's (PP-AL) text can be voted on directly in the plenary.