With tax reform, 23.6 million retirees will have income tax exemption

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Retirees and pensioners of the National Institute of Social Security (INSS) will have a relief in their pocket, if the proposal of tax reform which raises the exemption limit for the Income Tax of Individuals (IRPF) from R$1,903.98 to R$2,500 is approved by the National Congress. Currently, 23,683,780 beneficiaries receive up to R$2,500, according to INSS data.

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Of this total, 15,303,004 beneficiaries are over 65 years of age, which guarantees the right to double income tax exemption. In other words, a bonus with a limit of R$1,903.98 per month.

This benefit becomes a double exemption when the income is above this amount (R$3,807.96). What is left over after the bonus is deducted enters as taxable income. If the same logic is maintained, the double exemption will reach those who earn R$5,000 per month.

It is noteworthy, however, that those who still work or have other sources of income, such as rent, are not entitled to extra exemption on these earnings. In other words, the exemption will only apply to retirement or pension earnings. And whoever has more than one retirement/pension can only consider one of the installments exempt, the other will be taxable.

The professor of Tax Accounting at Ibmec/RJ, Paulo Henrique Pêgas, explains that today a retired person up to 65 years old who earns R$ 2,500 net and does not have a deduction, collects R$ 44.70 in income tax each month.

— With the new table, the tax will be zeroed — evaluates the teacher.

The calculation basis of the other salary ranges of the IR will also change, providing more relief to taxpayers. Pegas gives another example:

— A retiree over 65, who earns the INSS ceiling, currently R$6,433.57, will also have a tax reduction. Currently, he pays R$188.75. If Congress approves the reform, the payment will drop to R$162.54.

The changes proposed by the government are still below expectations, but they signal a path that must be taken, according to specialists.

— In addition to taxing dividends, correcting the table a little, taxing profits abroad, the proposal brought measures that catch large taxpayers, closed-end funds. (The text) also corrects distortions that were used by abusive tax planning – evaluates Kleber Cabral, president of Sindifisco Nacional.