The government sends the income tax exemption bill to Congress, compensatory measures spark debate as Congress reviews income tax reform, and the Senate approves reciprocity bill against trade barriers and tax increases

BRAZIL POLITICS - Report 19 Mar 2025 by Murillo de Aragão and Cristiano Noronha

The government, as previously announced, has sent to the National Congress a bill granting an income tax exemption for individuals earning up to R$ 5,000 per month. To offset the measure, which will have a fiscal cost of R$ 27 billion, the government proposed taxing those earning more than R$ 50,000 per month. The Joint Budget Committee (CMO) is set to vote on the 2025 budget this Friday, March 21. According to the committee’s published schedule, party leaders will meet today, March 19, to finalize details. On Thursday, March 20, Senator Ângelo Coronel (PSD-BA) will present his report. Thus, on Friday, the budget will be reviewed both by the CMO and the full Congress. The Central Bank's Monetary Policy Committee (Copom) is set to announce its decision today on the benchmark interest rate (Selic), currently at 13.25% per year. The expectation is for an increase to 14.25%.

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