Government wants to end “snitch” tax on stock market operations

The president’s government Luiz Inácio Lula da Silva (PT) wants the advancement of a technology developed by B3 in partnership with the Federal Revenue Service to enable, in the near future, the end of a type of charge made by the Tax Authorities on stock market transactions.

The intention is mentioned in the draft bill that deals with measures aimed at the capital market, to which the InfoMoney had access. The text was forwarded by the Ministry of Finance for analysis by the Civil House and should be sent by the Palácio do Planalto to the National Congress in the coming days.

Currently, every operation on B3 must comply with a rule for charging Income Tax Withheld at Source (IRRF) at a rate of 0.005%. The tax, called “hard finger” in the market, was created by the Federal Revenue Service to monitor operations at B3.

The idea, however, is that, in the future, depending on the tools for automating the calculation of the IR levied on net gains on the Stock Exchange, it will be possible to waive tax retention by means of an infra-legal act − that is, without the need for approval from the Legislative power.

One of the ways to achieve this would be the Auxiliary Program for Calculating Personal Income Tax for Variable Income Operations (ReVar), developed by B3 with the Federal Revenue Service and mentioned by name in the explanatory memorandum of the bill.

According to a source from the Ministry of Finance consulted by the report, ReVar could function as something similar to a pre-filled Income Tax declaration, reducing bureaucracy for the investor − which, as a consequence, could help attract new entrants to the Brazilian stock market .

Deadlines and limits for billing

The bill also brings changes in relation to the frequency of taxation, which goes from monthly to quarterly, and the limit on exempt operations, which increases from R$20,000 per month to R$60,000 in a period of 3 months. The idea is to increase flexibility, reduce bureaucracy for small investors and facilitate access to new entrants to the Stock Exchange.

The 15% IRRF rate was maintained on the earnings of individuals residing in the country and exempt legal entities opting for Simples Nacional. In case of “day trading” − that is, negotiations, with the same securities, started and closed on the same day (learn more about the subject by clicking here) − the rate, which is currently 20% on income, will be reduced to the same 15% as for other operations .