From 2017 to 2023, the richest 0.1 percent of Brazilians saw their income grow five times faster than that the average Brazilian. In six years, the real income of the richest 160 thousand rose 6.9 percent, surpassing the 1.4-percent national average.
With this difference, the richest 0.1 percent went from holding 9.1 percent of Brazil’s income in 2017 to holding 12.5 percent in 2023.
The figures can be found in a study by FiscalData, a group of researchers who analyze data on public budgets and tax issues, like income tax returns. The survey is signed by economists Frederico Nascimento Dutra, Priscila Kaiser Monteiro, and Sérgio Gobetti, who collected information disclosed by Brazil’s Revenue Service.
Gobetti is a researcher at the Institute for Applied Economic Research (IPEA), which is linked to Brazil’s Ministry of Planning and Budget; Kaiser Monteiro is an economist with a degree from the Federal University of Rio Grande do Sul (UFRGS) and a master’s degree from the Pontifical Catholic University of Rio Grande do Sul (PUC-RS); and Nascimento Dutra is an economist and data scientist at Minsait.
Strata
By dividing taxpayers into strata, the study classifies the richest 0.1 percent as those who have a monthly income of BRL 146.1 thousand or more. These 160 thousand, however, have an average monthly income of BRL 516 thousand.
Economists were also able to calculate the concentration of income in an even more smaller group – the 16 thousand people who correspond to the richest 0.01 percent in Brazil. In 2017, they held 4.3 percent of the national income – which went up to 6.2 percent in 2023. The average income of this group is BRL 2.57 million per month.
The study also looks at a broader but still quite small group – the richest one percent, the 1.6 million people making at least BRL 34,700 a month. They also saw their share of national income surge from 20.4 to 24.3 percent from 2017 to 2023. This group has an average income of BRL 103,800 per month.
While the income of the richest one percent grew 4.4 percent per year from 2017 to 2023, the Brazilian economy expanded 1.8 percent per year, and the income of Brazilian families as a whole grew 1.4 percent annually. (All variations are real, already discounted for inflation during the period – 49.7 percent.)
The experts estimate therefore that Brazil became more unequal from 2017 to 2023.
Total adult population
Richest 1%
Richest 0.1%
Richest 0.1%
Number of people
160.1 million
1.6 million
160 thousand
16 thousand
Average monthly income
BRL 3,400 to 3,900
BRL 103,800
BRL 516 thousand
BRL 2.57 million
Share of national income in 2017
100%
24.3%
12.5%
6.2%
Income increase 2013–2017
1.4%
4.4%
6.9%
7.9%
Profit distribution
The study names dividends and interest on equity capital as the drivers behind this enrichment. Both are ways in which a company shares part of its profits with shareholders.
In the richest one-percent group, 87.1 percent of the increase in share stemmed from these types of income. In the richest 0.1-percent group, 66 percent came from these sources.
The economists draw attention to the fact that this concentration occurred at a time of low growth in the Brazilian economy.
“One hypothesis we have put forward is that high domestic inflation, coupled with rising international prices for some commodities (raw materials such as those used in agribusiness), may have boosted the profits of large entrepreneurs and exporters, even though production volumes remained modest, as did the total wage bill,” they wrote.
Data on income tax
The article published by FiscalData contradicts the findings of Brazil’s statistics bureau IBGE, which shows that, in 2023, the difference between the highest and lowest incomes was the smallest since 2012.
The explanation, according to the authors of the study, lies in the fact that IBGE takes into account data from the Continuous National Household Sample Survey (known as PNAD Contínua), which is based on self-declaration by the respondents visited.
“As suspected, household surveys tend to underestimate income, especially at the top of the distribution, either by omission or because respondents are unaware of the magnitude of their earnings when multiple sources of income are considered,” the specialists noted.
“It is natural for people to know the exact amount of their salary, but they often do not accurately calculate their extra income from financial investments, dividends, or capital gains in their minds,” they added.
For comparative purposes, regarding the richest 0.01 percent, the study indicates that their average income exceeds BRL 2.5 million, while PNAD estimates just over BRL 200 thousand, the researchers said.
In the economists’ view, “any conclusion about income inequality that uses only PNAD data runs a serious risk of misdiagnosis.” The appropriate way to adequately gauge income inequality in Brazil, they argue, is to combine PNAD and Revenue Service data.
Tax policy
At the end of the article, Dutra, Monteiro, and Gobetti acknowledge that income transfer policies, such as welfare programs, “have played a vital role in reducing poverty and mitigating inequality at the bottom of the social pyramid over the last three decades.” However, they say, they are “absolutely insufficient and inadequate” in addressing the current issues at the root of increased concentration.
They believe that the problem must be tackled through a more active tax policy – revising special treatments such as the non-taxation of dividends.
“The good news is that an income tax reform that addresses this challenge could be beneficial – not only from a distribution standpoint, but also from an economic efficiency standpoint, insofar as many of the loopholes and distortions that currently benefit those at the top of the Brazilian social pyramid also appear to be detrimental to competitiveness and economic development,” the article concludes saying.
Tax reform
The study is being published at a time when income tax reform is one of the priorities in Congress in the second half of the year.
The lower house is currently examining bill 1,087/2025, drafted by the government, which establishes an exemption from personal income tax for those earning up to BRL 5 thousand per month and a partial reduction in tax for those earning up to BRL 7 thousand.
On the other hand, to compensate for the loss of revenue from the exemption, the bill stipulates the collection of an extra progressive rate of up to 10 percent for those who earn more than BRL 600 thousand per year – or BRL 50 thousand per month. The maximum extra rate of 10 percent will be charged to people earning BRL 1.2 million per year or more.
Gobetti believes that a policy taxing dividends paid to company shareholders would not cause companies to pass on the cost to consumers.
“The rationale for passing on costs to prices may apply if we were talking about taxing corporate profits. But what’s under discussion is taxing dividends distributed to shareholders,” he told Agência Brasil.
In small businesses, owners often manage their businesses and derive their income from the profits earned. In this case, Gobetti believes that “it is true that these two things are often confused – the company’s profit and the owner’s earnings – but you need to look at it from two angles. First, these small businesses already enjoy significantly lower taxation than large ones. Second, Brazilian companies in general have already adjusted their prices to a large degree in recent years, which is the driver behind the increase in profits in Brazil.”
A third point, he adds, is that there does not seem to be “much room or justification” for small companies to adjust their prices yet again, “especially since this could reduce their consumer base compared to larger companies.”
