President Luis Inacio Lula da Silva this Monday (28th) authorized Law No. 14,663 of 2023 to change the minimum wage rebalancing policy and rebalancing the Individual Income Tax Schedule (IRPF). This regulation originated in the Conversion Bill (PLV) 15/2023, which was derived from MP 1,172/2023, which was approved by the Senate on 24 August.
This interim measure would initially raise the minimum wage to 1,320 reais, and the Mixed Commission suggested in a report by Deputy MP Merlon Solano (PT-PI) that a permanent policy would be to amend the minimum wage based on GDP and inflation. was included in the text. Also added a fix for the IR table.
Government leader Sen. Jack Wagner (PT-BA), the rapporteur of the Senate papers, recalled that the realignment policy was also adopted in President Lula’s previous term.
— (the policy was) applied for several years, raising the minimum wage with real benefits meant more money went into the pockets of workers, thus moving more commerce, with beneficial consequences for the Brazilian economy . Prosperity to all families.
The law sets out a policy to permanently increase the minimum wage and will come into force from 1 January 2024. This means that the minimum wage is readjusted annually to keep up with inflation and ensure real benefits for workers.
Individual Income Tax (IRPF) exemptions were expanded during the MPs process. Currently, people with a monthly income of up to R$2,640 are exempt from paying taxes. Previously, the exemption was for beneficiaries up to R$1,903.98 per month. The code aims to reduce the tax burden on salaries and benefit low-income taxpayers.
It also established the possibility for non-exempt taxpayers to opt for a discount of R$528 on the tax due without having to prove the expenses against the revenue. This means that individuals who receive up to R$2,640 per month will also not have to pay IRPF if they opt for the simplified deduction.
The tax rates for other monthly income ranges have not changed, but will benefit from the expanded exemption range. Because he pays the IRPF based on the amount they exceed this amount. The change in the deductibility will affect next year’s income tax, but those who do withholding tax should already be aware of the change in the amount that will be deducted from next month’s salary.
Senad Office (reproduced with permission based on Senad Senate citation)