INSUBCONTINENT EXCLUSIVE:
On February 17, 2025, the Brazilian government announced a major income tax reform designed to reduce inequality and ease the tax burden on
benefit millions while addressing fiscal imbalances
The reform raises the income tax exemption threshold to 5,000 reais per month (approximately $874), starting in 2025.This change will exempt
an additional 10 million workers from paying income tax, building on a 2024 adjustment that increased the threshold to 2,640 reais ($470),
which already benefited 15.9 million Brazilians.By the end of implementation, nearly 26 million people will no longer pay income tax
high-income earners currently pay lower effective tax rates than many middle- and low-income workers due to existing loopholes
The new measure aims to close this gap and ensure wealthier individuals contribute more fairly.Brazil Unveils Income Tax Reform to Benefit
the complex tax structure and promoting fairness remain central goals
While the reform could stimulate economic activity and improve equity, it faces potential resistance from Congress and wealthy interest
groups.Analysts have also raised concerns about balancing revenue needs with fiscal stability
This reform signals a shift toward progressive taxation in Brazil, with significant implications for workers, investors, and policymakers.By
targeting inequality and maintaining fiscal responsibility, the government aims to foster long-term economic growth
