Haddad: Reducing working hours will be Lula's next priority

Reducing working hours is the next priority President Lula will embrace. The issue will gain momentum in the government's discourse and actions after Congress approved the law granting income tax exemptions to the poorest and higher taxes on millionaires, two of Lula's promises in the 2022 election.

"The president is concerned about responding to a global movement to revive the debate on working hours. So much technology should mean a little more free time for people," Finance Minister Fernando Haddad said in a YouTube interview this Thursday, the 10th, with several media outlets, including CartaCapital . “As soon as we approve the income reform, we will have more energy freed up to focus on the issue of scale.”

According to the Constitution, the maximum working day is 44 hours per week and eight hours per day. In practice, many workers work six days a week and have only one day off. This is known as the 6-for-1 work schedule.

There's a proposal in Congress, authored by Representative Erika Hilton (PSOL-SP), to end this shift. It requires changes to the Constitution. The Workers' Party (PT) caucus believes it's possible to change the workday without altering the 1988 Constitution. A bill would suffice, requiring fewer votes from representatives and senators to be approved.

While the day to raise the banner of reduced working hours awaits, the government is pushing hard to "put the rich on income tax" and fully exempt salaries of up to R$5,000 and partially exempt salaries of up to R$7,000. The exemptions would benefit 15 million people, according to the government, which, to offset the loss in revenue, estimated at R$25 billion per year , wants to collect more taxes from 141,000 millionaires.

This compensation would reduce inequality, according to studies by the Economic Policy Secretariat of the Ministry of Finance.

“We will begin to correct social inequality in Brazil, which is persistent” , Haddad stated. According to him, Brazil has a worse income concentration than 47 of the 54 African countries. One of the reasons is, precisely, the country's historical tax injustice.

A document presented to Congress during Haddad's interview demonstrates an "archeology of tax regressivity in Brazil." While the poorest spend 32% of their income on taxes, the elite spend 10%. The burden of consumption taxes is greater than that of income and assets, unlike what happens in developed nations in the global North.

The work was discussed at a meeting of the Parliamentary Front to Combat Inequalities, created on the initiative of Congressman Guilherme Boulos (PSOL-SP) in 2023. It was authored by Oxfam Brasil , an entity that is part of a global tax justice network.

The entity advocates two measures to combat regressiveness: repealing the income tax exemption in place since 1995 on the distribution of profits and dividends to company partners, and eliminating the tax on large fortunes, which has been provided for in the Constitution since 1988 and has never been implemented.

Filmmaker Walter Moreira Salle, director of the film I'm Still Here and a billionaire himself, publicly defended the taxation of large fortunes , when receiving an award last Tuesday 8.

In the proposed income tax reform, the government attempts to tax profits and dividends at 10%, but this rate would only actually be applied based on more general calculations of how much a millionaire would have collected in income tax on all of their earnings.

The Federal Revenue Auditors' Union (Sindifisco) officially proposed to the bill's rapporteur, Congressman Arthur Lira (PP-AL), that this rate be raised to 15%. Based on Central Bank data, the union states that, from 2014 to 2024, 1.6 trillion reais in tax-exempt profits and dividends were sent abroad. In 2024 alone, the figure was 226 billion reais.

A 15% tax, says Sindifisco, would have generated 97 billion reais in 10 years, considering that some taxpayers would find ways to escape the "lion."