Brazil’s Chamber of Deputies has unanimously approved Bill 1087/2025, a flagship proposal from President Luiz Inácio Lula da Silva’s administration to reform income tax. The measure exempts formal workers earning up to 5,000 reais per month (about US$1,000) and gradually reduces rates for those making up to 7,350 reais (approx. US$1,470). The bill, which passed with 493 votes in favor, now moves to the Federal Senate.
The Workers’ Party (PT) leader in the chamber, Lindbergh Farias, hailed the outcome as a “historic night” for Brazil. “Fifteen million Brazilians will benefit. Only 141,000 people, just 0.06% of the population, will pay more. This is justice, and it sets Brazil on the right path,” he said. Lawmaker Alencar Santana added that the reform marks the “first step toward tax justice” and delivers on a central campaign promise by Lula.
The victory was also attributed to massive street mobilizations earlier this month, which pressured even Bolsonaro-aligned lawmakers to support the measure. “Many voted quietly, even embarrassed, because they didn’t want to give Lula this win, but the strength of the people forced their hand,” Santana noted. Leftwing lawmaker Fernanda Melchionna said the reform should be just the beginning of broader redistribution: “We must move forward with taxing the super-rich and addressing deep social inequalities.”
Institutional Relations Minister Gleisi Hoffmann called the day “historic for the Brazilian people,” emphasizing that the reform shifts the burden toward the wealthiest while relieving working-class families.
The opposition attempted to weaken the proposal with amendments, but most were rejected for lack of budgetary consistency. A handful of last-minute adjustments were included, covering university scholarships (ProUni), compensation for municipalities losing revenue, rules on notary taxation, and clarification that new dividend taxes will only take effect in 2026.
