After the Senate approved the interim measure, which raises the minimum wage to R$1,320 (US$269) later this year and establishes a new annual assessment policy as well as adjustments to the individual income tax table (IRPF), Brazilian President Lula da Silva approved the text on Monday, 28 August, at the Planalto Palace, as reported by Brasil 247, a partner of TV BRICS.

According to the approved text, from 1 January, the minimum wage will be increased based on an index that takes into account both inflation and the positive dynamics of the gross domestic product (GDP) for the two previous years. The government projects that with the new adjustment policy, the minimum wage will be 1,421 reais ($290) next year. However, this amount will not be confirmed until early 2024, after calculating inflation for 2023.

The change represents a 2.8 per cent increase from the value set at the beginning of the year by the previous government, which was R$1,302 (US$266). A real increase in the minimum wage, that is, above inflation, was Lula’s election promise. As for income tax, those earning less than 2,112 reais ($431, 7) a month are exempt. The next range, which takes into account the 7.5 per cent rate, has been adjusted and now covers a range of R$2,112.01 to R$2,826.65 ($431-$577). In this case, the income tax deduction is R$158.40 ($32.4).

Photo: IStock