Interview of Juliana Assolari for Estadão. Read the full article
The period of settling accounts with the taxman has already begun, and taxpayers may file the 2024 Income Tax (IR) return until May 31. Every year, taxpayers must report to the Federal Revenue Service (Receita Federal) all the income and assets they held during the 12 months of the previous period.
The amounts collected through the Income Tax are intended to contribute to Brazil’s development, financing health, education, security, and countless public services provided to the Brazilian citizen. According to the government, in the 2023 aggregate, the revenues administered by the Receita amounted to R$ 2.204 trillion.
But how is the amount collected distributed? To clear up this doubt, E-Investidor consulted specialists.
Who keeps the Income Tax amount?
There are several destinations for the amount collected from the Income Tax. According to Juliana Assolari, partner at Lassori Advogados, the distribution follows the constitutional text and occurs as follows:
– 50% to the Federal Union;
– 47% to States and municipalities, as follows:
– 21.5% to the Participation Fund of the States and of the Federal District;
– 25.5% to the Participation Fund of the Municipalities;
– 3% allocated to programs financing the productive sector of the North, Northeast, and Center-West Regions.
The percentage of distribution of resources to the Participation Funds of the States and of the Municipalities takes into account certain criteria, such as population and per capita income. In addition, anyone who files the Individual Income Tax return under the full model may choose to allocate 6% of the refund amount to the Fund for the Rights of Children and Adolescents and to the Fund for the Rights of the Elderly.
Assolari also indicates that IR resources have no specific earmarking and may be used “freely.” However, there are certain rules that the public authorities must follow.
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