Motta says he will vote for income tax exemption of up to R$5,000 and Gleisi claims to have the support of “everyone” for the proposal

The President of the Chamber of Deputies, Hugo Motta (Republicanos-PB), said this Monday (8) that he will schedule the vote on the government's project that expands the Income Tax exemption range for those who earn up to R$5,000. According to him, the proposal is a priority and a commitment for this second half of the year.

The announcement came shortly after a report in the newspaper Valor Econômico indicated that the government could issue a Provisional Measure to bring the exemption into effect later this year.

"I just spoke with the Minister of the Secretariat for Institutional Relations, Gleisi Hoffmann, and informed her that the Chamber of Deputies is committed to voting on the bill that expands the income tax exemption through Bill 1087/2025, reported by Representative Arthur Lira (PP-AL). The Chamber understands that this is a priority for Brazil and Brazilians," the congressman stated on social media with a reproduction of the report.

The proposal is a promise from President Luiz Inácio Inácio Lula da Silva's (PT) 2022 election campaign and, if approved, will come into effect in 2026, the year in which he is expected to run for reelection.

Currently, workers earning up to two minimum wages, equivalent to R$3,036 in 2025, are exempt from taxation. The new project extends the exemption range to income of up to R$5,000 and provides a partial discount for those earning between R$5,000 and R$7,350.

Preliminary estimates indicate that the measure could generate an impact of approximately R$26 billion on public finances. To offset the tax break, the bill provides for high-income taxpayers to be taxed at rates of up to 10% on profits and dividends received from companies—however, this compensation remains divisive within the Chamber of Deputies.

The bill proposed by Lira received adjustments in a special committee and was approved for urgent processing on August 28. The Planalto Palace is pushing for a swift vote, as the bill also needs to be approved by the Senate and sanctioned by October to come into effect next year.

While announcing the vote on the proposal, Gleisi Hoffmann also reinforced the alignment of parties that partially form the basis for its approval. After a meeting with ministers linked to centrist parties, such as União Brasil, PSD, Republicanos, and PP, the minister stated that there is consensus around the measure.

"We all agreed to strengthen the agendas of the IR exemption up to R$5,000, the MPs for reducing electricity bills, the Gas do Povo, the Public Security PEC, among others," Gleisi also posted on a social network.

The meeting of centrist ministers was hastily called to discuss, among other matters, progress in Congress on a proposal to grant amnesty to those convicted of the acts of January 8, 2023. The list of attendees, however, was not released.

With the exception of the PSD, the other three parties have already declared themselves in favor of the proposal , as recently stated by the president of the PL, Valdemar Costa Neto, who heads the campaign for amnesty.

There is also the aggravating factor that the União and the PP – which formed a federation – have already determined that their members leave their government positions.