More than a week after its approval in Congress, the project to expand the income tax exemption for those earning up to R$5,000 has still not received approval from President Luiz Inacio Lula da Silva (PT). Planalto points out that the postponement of the signing was done to ensure the presence of more MPs at the approval ceremony, while interlocutors say that the handling of the anti-factional bill (PL) in the chamber hindered the plan.
Last week, PT members announced that they would sanction the document this Tuesday (November 11) when they returned to Brasilia after the opening of the 30th session of the United Nations Framework Convention on Climate Change (COP30) in Belém (Pennsylvania).
Lula returned to the federal capital on Monday night (10/11), but Planalto has not yet decided on a date for the event.
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After the document reaches the executive branch, the president has 15 business days to approve it. Therefore, the deadline for Lula to legislate the project is November 27th.
According to Minister for Institutional Affairs (PT) Gleij Hofmann, no date has yet been set for the sanctions. Gleici said he did not think any action should be taken until this week or next, as parliament would be empty and the political impact of the event could be lessened.
In an interview with reporters, the minister declared: “Parliament is empty this week. Next week is also supposed to be a holiday, and I think it is important that the sanctions are implemented with the participation of the members of parliament who helped approve the bill. There is a deadline. If I remember correctly, the deadline for sanctions is the end of November, and we will implement them by the deadline.”
New IR exemption scope
- Expanding exemptions is one of the main bets of Lula’s government, which promised the measure during the 2022 election campaign, and it is hoped that the law will be one of the slogans of next year’s re-election campaign.
- The project was presented by the Ministry of Finance in March and processed in the National Assembly for about nine months.
- In addition to a full exemption for incomes of R$5,000, the proposal also allows partial exemptions for those with incomes of up to R$7,350.
- In return, the government’s project proposes a tax on the so-called “ultra-rich”, imposing a 10% tax on individuals with an annual income of more than 600,000 reais.
- According to the federal government, 25 million people will benefit from the expansion of the IR exemption.
- If sanctions are imposed by November 27, the measures will take effect in 2026.
PL antifaction
However, behind the scenes, government interlocutors admit that the postponement of the sanctions ceremony was also influenced by the priorities of the House of Commons processing of Bill (PL) 5582/2025, known as the PL opposition.
The proposal, drawn up by the Ministry of Justice and sent to Parliament by Mr. Planalt two weeks ago, aims to strengthen the fight against criminal organizations and is the main topic of the government’s security agenda at the end of the legislative year. This theme was driven by the impact of the large-scale operation against Commando Vermelho (CV) in Rio de Janeiro, which left 121 people dead.
However, Planalt rebelled after project rapporteur Guilherme Delight (PP-SP) made changes to the project that displeased the government.
On Wednesday (12/11), the Minister for Political Decisions met with parliamentary leaders and increased pressure to postpone the vote scheduled for that day.
The request also comes from right-wing governors who met with House Speaker Hugo Motta (R-PB) to join in the effort to support the postponement, making the same argument as government supporters: that the project is of such a large scale that it needs to be better discussed before it is voted on.
Hours later, Mr. Motta gave in to the plea and announced that the debate would be postponed to next Tuesday (11/18).
Delight also changed the text of the project under pressure. After a meeting with Manoel Carlos de Almeida Neto, Secretary General of the Ministry of Justice, the Rapporteur submitted the fourth version of his opinion. In the new document, he responded to the government’s requests related to funding the activities of the Federal Police (PF) and included his own definition of criminal factions, which was provided for in MJ’s original proposal.
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