The Brazilian president, Luiz Inácio Lula da Silva, signed a Provisional Measure (MP) on Monday 28 to modify the collection of taxes on exclusive investment funds, used by the super-rich to save. The MP equalizes the taxation of these funds to that of other investment funds offered by banks and securities agencies.
Through the measure, between 15% and 20% of the income of the exclusive funds will be collected in the form of a tax, twice a year. Billing follows the system known in Brazil as “come quotas”, in which an automatic taxation is applied on the capital gains obtained by the investor.
Previously, the yield charge only occurred in the event of redemption.
:: For more space in the Budget, the Brazilian government intends to tax the rich ::
The government forecast is to collect 24 billion reais (approx. 4.9 billion USD) between 2023 and 2026.
“We are going to include the rich in paying taxes, the poorest in the budget, and we are going to ensure dignity for Brazilian families,” Lula said on his social networks after signing the measure.
Lula also sent a bill to the National Congress for the collection of income from Brazilians paid by offshore companies located in tax havens.
The taxation of this income was provided for in the MP, which granted an extra increase to the national minimum wage. This part of the measure, however, was not voted on and lost its validity. For this reason, the government sent an urgent project on the same subject.
:: With the new fiscal framework, the government will look for ways to collect 162 billion reais and meet the goal in 2024 ::
According to the government, more than 1 trillion reais (approx. 205.7 billion USD) invested abroad belong to Brazilians. The collection of income taxes from this amount could generate 7.05 billion reais (1.45 billion USD) in 2024, 6.75 billion reais (1.38 billion USD) in 2025 and R$ 7.13 billion (1.46 billion USD) in 2026 for the Union.
Tax charges range from 0% to 22.5% depending on foreign income.
Also this Monday, Lula promulgated the law that establishes a national salary floor valuation policy and another that corrects the Income Tax collection table.
“I have just sanctioned another campaign commitment: the law that establishes the policy of permanently valuing the minimum wage and updating the income tax exemption table. They were years without a real increase in the minimum wage and without valuing the workers. A important step, which was taken with the support of the National Congress,” he said.
I have just sanctioned yet another campaign commitment: the law establishing the policy of permanently increasing the minimum wage and updating the income tax exemption table. There were years without a real increase in the minimum wage and without valuing workers. One step…
— Lula (@LulaOficial) August 28, 2023
Editing: Nadini Lopes and Thalita Pires