Historic Shift in Brazil’s Tax Policy: Lula Eases Burden on Working Families While Taxing the Ultra-Rich

Original article: Giro histórico en Brasil por la justicia social: Lula alivia a familias trabajadoras y traslada impuestos a súper ricos

Brazil Approves Historic Tax Reform: Tax Exemptions for 25 Million and Minimum Rate for the Ultra-Rich

Brazil’s Senate unanimously approved a historic tax reform on Wednesday, marking a significant legislative achievement for President Luiz Inácio Lula da Silva. The measure, which had already been sanctioned by the Chamber of Deputies, exempts income tax for individuals earning up to 5,000 reais per month (approximately $930), benefiting around 25 million workers, according to government data.

To offset the loss of revenue, the reform introduces a minimum tax aimed at the ultra-wealthy, impacting just 0.13% of taxpayers. This tax will apply to annual incomes exceeding 600,000 reais ($113,000), with a maximum rate of 10% for earnings above 1.2 million reais ($223,000), encompassing corporate dividends, which are the primary income source for the richest individuals.

President Lula hailed the approval as a «historic day» and a «victory for democracy and social justice,» emphasizing that the guiding principle is «tax justice.» This reform—a key promise from his 2022 campaign—is vital for his re-election ambitions in 2026 and awaits presidential sanction to come into effect next year.

For an in-depth analysis of this landmark shift in Brazil’s fiscal policy, the program La Base from Canal RED AMÉRICA LATINA, hosted by Inna Afinogenova, provides a comprehensive report. The public is invited to watch the explanatory video through the following link: