Is income tax on dividends just a matter of time? Find out what Lula, Bolsonaro, Ciro and Tebet think about taxation

the charge of income tax about dividends was approved in the Chamber last year, as part of the tax reform, but is stalled in the Senate, where the matter has not yet been voted on.

The forecast is that the reform – and the taxation of profits and dividends – be appreciated in the House in 2023. And, depending on who is in the presidency of the Republic, taxation must pass.

THE dividend taxationcurrently exempt from IR, is defended by the four candidates best placed in the polls in the electoral race for the highest Executive position in the country.

Both current President Jair Bolsonaro, who defended the charge throughout his government, and Lula, Ciro Gomes and Simone Tebet say they are in favor of taxing the distribution of profits by companies to their investors, including individuals.

This Tuesday (20th), we started, here in Seu Dinheiro, a series of reports on the proposals and ideas of the main candidates for the presidency of the Republic that can more directly affect Brazilian individual investors – that is, those people who are banked , are able to obtain loans and financing when needed, and usually have room in the budget to save and invest.

The first topic of our series is precisely the taxation of profits and dividends and how, apparently, the institution of this taxation is only a matter of time.

What do Lula, Bolsonaro, Ciro and Tebet think about the collection of income tax on profits and dividends

Although all four candidates have already publicly come out in favor of taxing dividends, Ciro Gomes was the only one who put the measure among his government proposals. All the others only expressed themselves on the subject in person or through their economic advisors.

1. Jair Bolsonaro (PL)

It was in the Jair Bolsonaro government that a tax reform began to be voted in Congress that includes the taxation of profits and dividends at 15%, in parallel with the end of interest on equity (JCP), which currently contribute to companies paying less tax. in legal entities, and a reduction in IRPJ and CSLL paid by companies.

But recently, the President of the Republic and his Minister of Economy, Paulo Guedes, returned to the subject of taxation of dividends on different occasions. But now with an updated outfit: the 15% rate would be used to fund the Auxílio Brasil of R$ 600 and the readjustment of the income tax table, two promises of the Bolsonarista campaign.

In addition, Bolsonaro said that taxation would only fall on those who earn more than BRL 400,000 per month, which would exclude most individual investors – but that is not what is in the reform proposal stalled in the Senate, as we will see later.

2. Squid (PT)

In an interview with Rádio Super, from Minas Gerais, in mid-August, former president Lula defended the proposal to tax profits and dividends.

“It’s unbelievable a person who works to pay 27.5% in income tax, and you have offices that pay 14%, 13%, 12%. Let’s have a very serious discussion,” she said. On the same occasion, PT defended exemption from IR for those who earn up to R$ 5 thousand per month.

In early September, during a meeting with representatives of the National Defense Front of the Unified Social Assistance System (SUAS), Lula touched on the issue of dividend taxation when asking for help in electing his supporters to Congress:

“We will have to elect a lot of (sic) deputies and senators, because we need to make a new tax policy in this country. We have to relieve the salary to encumber the richest people in this country. , he said.

3. Ciro Gomes (PDT)

Ciro is the only candidate who speaks directly about the collection of income tax on profits and dividends in the document that brings together his government proposals.

In the chapter “Growing and creating more jobs”, the program advocates a “broad tax and fiscal reform” in order to finance public policies, maintaining “fiscal balance and sustainability of public accounts”.

Such reform would be based on a few points, among them the “recreation of the tax on distributed profits and dividends”, which, according to the program, would generate revenue for the government of around R$ 70 billion.

4. Simone Tebet (MDB)

Simone Tebet defended the taxation of profits and dividends in her interview in Jornal Nacional, when talking about tax reform. For her, it would be a “Robin Hood law”, as it would allow the reduction of income tax for those who earn less.

“We have to guarantee more space for the middle class. In other words, we have to make sure that the middle class can not pay income tax. For that, there is only one way, to take from the poorest and ask for the richest. . I am in favor of taxation of profits and dividends”, said the senator at the time.

“And we tinker with the income tax table as we charge this rate of profits and dividends from the rich. It’s Robin Hood law, but we’re not going to steal from anyone. We’re going to ask them to contribute minimally to a country, that it is the richest country in the world with the poorest people”, he added.

The collection of income tax on dividends was also recently defended by Elena Landau, Tebet’s economic adviser.

What the tax reform stalled in the Senate defends regarding the taxation of dividends

Whether with a new tax reform, or with the progress of the one that is already awaiting a vote in the Senate, everything indicates that the collection of income tax on dividends should come into force in the next government.

If the measure that is already being processed in Congress is approved, the proposal provides for the following:

  • Taxation of dividends at the rate of 15%;
  • End of interest on equity (JCP), which makes companies pay less corporate income tax (IRPJ); and
  • Reduction of the IRPJ rate by 7 percentage points, from 25% to 18%, and CSLL (Social Contribution on Net Income) by 1 percentage point, from 8% to 7%.

There is, for the time being, no exemption limit for the taxation of dividends. In principle, taxation would affect any investor, even a small one.

From the shareholder’s point of view, he will pay more tax in general, but the reduction of the IRPJ and CSLL slightly reduces the burden of taxation on dividends.

Be that as it may, if you are one of those who likes to invest in stocks with an eye on the dividends distributed, prepare to pay IR on dividends received, because this really seems to be a one-way street.

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