Guedes conditions income tax exemptions upon the creation of new taxes

BRAZIL POLITICS - Report 29 Jul 2020 by Murillo de Aragão and Cristiano Noronha

After a meeting today at the Planalto Palace, Economy Minister Paulo Guedes indicated that an expansion of the range of people exempt from Income Tax (IR) will only be possible after the creation of a new tax to expand the government´s revenue base. The expansion of the tax base designed by the government involves the creation of a tax on payments along the lines of the extinct CPMF, with a focus on collecting mainly from electronic transactions. Initial studies indicate a rate of 0.2% on electronic transactions would yield a collection of R$ 120 billion per year, enough to end the social security contribution levied on wages in contracts of up to 1.5x the minimum wage.

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