This Thursday (16), President Luiz Inácio Lula da Silva (PT) confirms the increase in the minimum wage from May 2023. The government was analyzing the confirmation for the first months of this year. Along with the increase, the new income tax declaration exemption range was also announced.
We are raising the minimum wage to R$1,320 in May and we are going to recover the rule in which wages, in addition to inflationary replacement, will have the GDP growth, because it is the fairest way to distribute the growth of the economy.
— Lula (@LulaOficial) February 16, 2023
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new minimum wage
The exemption from Income tax will no longer be R$ 1,903.98, becoming R$ 2,640.00 as of this year. The minimum wage last year was BRL 1,212, rising to BRL 1,302 according to the Bolsonaro government’s (PL) planning for the year 2023. The current value considers the real gain of 1.4% in inflation assessed by the National Consumer Price Index (INPC).
Later this year, the minimum wage will increase again. The amount presented and approved by the National Congress for the General Budget of the Union for 2023 was estimated at R$ 1,320. For the value to be effective, the Executive will need a new Provisional Measure. However, this is a question for the government, as the new value will be even greater for the public coffers.
The impasse for the effect increase was discussed and negotiated with the government's economic team and the INSS (National Social Security Institute) is the reason for great indecision. The last months of 2022 ensured an increase in pensioners and new retirements at the Institute, making the fiscal impact of the increase considerably high.
The INSS is based on the national floor and, by increasing the minimum wage, all other benefits would be readjusted: PIS/Pasep, BPC, unemployment insurance and others.
Income tax
The readjustment of the Income Tax (IR) table was also updated. According to Lula, the exemption range will be R$2,640, with the possibility of increasing up to R$5,000. In 2023, therefore, those who receive a minimum wage will be exempt from paying the tax.
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