Lula decrees tax exemptions for those who earn less and raises the minimum wage in Brazil | International

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President Lula, at the May Day events in Sao Paulo, this Monday.NELSON ALMEIDA (AFP)

40% of Brazilians who paid income tax last year will not have to do so in this campaign thanks to a decree signed this Sunday, the eve of Workers' Day, by President Luiz Inácio Lula da Silva, who forged his career as a union leader. The president announced in a televised speech a tax break for lower-income taxpayers. Whoever earns less than 2,640 reais per month (480 euros, 530 dollars) is exempt from declaring them. Lula also revealed that the minimum wage will rise 20 reais, up to 1,320 (240 euros, 265 dollars). The leader of the Brazilian left has participated this Monday in the events of May Day in São Paulo, where he has defended equal pay between men and women.

Both measures have a broad impact and reinforce the leftist profile of a government that is mainly supported by Lula's Workers' Party (PT). The exemption from paying income tax affects 13 million taxpayers. And the increase in the minimum wage directly or indirectly impacts 25% of Brazilians, according to the calculations of the newspaper or globe based on official data.

Hours after Lula announced this tax cut, his predecessor Jair Bolsonaro, from the extreme right, has staged his first public act in Brazil since he left the Presidency and returned a month ago from the United States. The former president, acclaimed by his followers, has participated in one of the largest agricultural fairs in the country together with the governor of São Paulo, Tarcísio de Freitas, the Bolsonarista with the best chance of succeeding him as the right-wing leader if he were disqualified from attending the upcoming elections. "We are a great country and we can be an agricultural superpower," the former president has proclaimed, reports Reuters.

The Riberão Preto Agrishow (300 kilometers from São Paulo) invited Bolsonaro while withdrawing the invitation to the Minister of Agriculture. The agricultural sector is the engine of the Brazilian economy and one of the sectors that most compactly supports the far-right leader.

President Jair Bolsonaro this Monday at the Agrishow agricultural fair, in Riberão Preto, São Paulo, his first public act in Brazil since he left power.
President Jair Bolsonaro this Monday at the Agrishow agricultural fair, in Riberão Preto, São Paulo, his first public act in Brazil since he left power. CARLA CARNIEL (REUTERS)

The judicial investigations to which he is the subject have kept Bolsonaro quite busy since he returned from Florida. He has already had to give a statement to the police about his role in the Brasilia coup assault and about the Saudi jewels he tried to appropriate.

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Lula's fiscal announcement is a gesture towards a section of the electorate that resists him because in recent years it has shifted to the right, but at the same time it is an added pressure on public accounts when Congress has not yet approved the new spending rule proposed by the Government to replace the spending ceiling that Jair Bolsonaro repeatedly skipped.

The Government intends to offset the impact of the tax exemption for lower wages on public coffers by taxing the benefits of foreign investments made through applications.

With this exemption and the small increase in the minimum wage, the leader of the Brazilian left wants workers to have more money to spend and stimulate the economy at a time when interest rates are at 13.75%.

The president stressed in his televised speech his commitment that, by the end of his term in 2026, all wages of less than 5,000 reais per month will be exempt from income. It was one of his great electoral promises, as well as increasing the minimum wage above inflation every year, something that did not happen during the entire Bolsonaro term.

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