1. Bill exempting income tax for those earning up to R$ 5,000 to be discussed in congress

Taxpayers earning up to R$ 5,000 per month may become fully exempt from Income Tax (IR), according to a bill submitted by President Luiz Inácio Lula da Silva (PT) to the National Congress. For this group, the proposal includes a discount of up to R$ 312.89 on the tax due, ensuring that the final amount owed is zero.

The government estimates that 10 million current taxpayers will become exempt under this measure. According to the proposal, the revenue loss will be offset by the creation of a minimum tax on high incomes (those earning at least R$ 600,000 per year).

To take effect in 2026, the proposal must be approved by the National Congress by the end of this year.

Folha de SP: Renda até R$ 5.000 será isenta, e quem ganha até R$ 7.000 terá desconto de imposto; veja proposta do IR

2. Central bank raises benchmark interest rate to 14.25%

The Central Bank’s Monetary Policy Committee (Copom) unanimously decided to raise the economy’s benchmark interest rate from 13.25% to 14.25%, the highest level since the Dilma Rousseff administration’s crisis in 2015 and 2016, when the rate also reached 14.25%.

This announcement marks the fifth consecutive increase in the Selic rate, reflecting the Central Bank’s concerns over inflation in a heated economic scenario. Last year, the Gross Domestic Product (GDP) grew by 3.4%, indicating stronger economic activity, another factor influencing the decision.

To set interest rates, the Central Bank follows the inflation targeting system. If projections align with the 3% annual target, rates can be lowered. If inflation is above target, the trend is to maintain or raise the Selic rate. There is even a forecast for another increase at the next Copom meeting, scheduled for May.

G1: Banco Central aumenta taxa básica de juros para 14,25%, maior patamar desde governo Dilma, e indica próximo aumento menor
Agência Brasil: Copom eleva juros básicos da economia para 14,25% ao ano

3. Committee approves 2025 budget

On Thursday (30), Congress’ Joint Budget Committee (CMO) approved the federal budget for 2025. The proposal maintains the government’s fiscal target of a zero-deficit balance in public accounts for 2025 but anticipates improved revenue collection, projecting a surplus of R$ 15 billion, higher than the government’s initial forecast of R$ 3.7 billion.

The bill, approved nearly seven months after being submitted to Congress, will now be voted on in a joint session of the House and Senate. If passed, the budget will take effect officially, allowing the government to fully execute the planned expenditures for 2025.

G1: Comissão aprova o Orçamento de 2025; texto vai para votação no Congresso

4. Industrial revenue grew 3.3% in January

Driven by increased production and consumption, the real revenue (adjusted for inflation) of the manufacturing industry grew by 3.3% in January, according to data from the Industrial Indicators survey by the National Confederation of Industry (CNI). Compared to January of last year, revenue rose by 12.8%.

According to CNI, demand for industrial goods remains high. However, the industry’s strong performance is not equally reflected in the labor market: in January, the number of active jobs in the sector increased by only 0.1%, total wages paid fell by 0.3%, and the average earnings of industrial workers declined by 0.8%. CNI expects industrial employment growth to stall due to rising interest rates.

Agência Brasil: Faturamento da indústria cresce 3,3% em janeiro

5. São Paulo’s GDP Grows 3.4% in 2024

Data released by the Seade Foundation shows that São Paulo State’s Gross Domestic Product (GDP) grew by 3.4% in 2024 compared to 2023. During this period, the services sector expanded by 3.3%, while industry grew by 2.7%.

At current prices, São Paulo’s GDP reached R$ 3.5 trillion in 2024, up from R$ 3.2 trillion in the previous year. In December 2024, the state’s GDP increased by 1.2% year-over-year, driven by growth in agriculture (4.4%) and services (1.9%).

Poder360: PIB paulista cresce 3,4% em 2024