Changes to the IOF and the VGBL: what does this mean for those thinking about retirement?

Para reforçar o caixa, o governo federal aumenta tributo de plano de previdência privada.

The Federal Government has published a new decree amending the collection of IOF (Tax on Financial Transactions) on various transactions. One of the most significant changes concerns private pension plans of the VGBL type - widely used by those looking for security in the future.

From now on, those who make monthly contributions of more than R$50,000 to a VGBL will pay 5% IOF when they invest.

Although the government justifies the measure as a way of correcting distortions and avoiding the misuse of these plans as an instrument to escape taxation by investment funds, in practice what we are seeing is an increase in the tax burden for those who regularly invest in these products - precisely those that have always been considered the most efficient for the long term.

This could affect the attractiveness of the VGBL, which has always been one of the most sought-after alternatives for retirement or inheritance planning, due to the strategic taxation on redemption, and because it is not included in the ITCMD calculation base in many states during inheritance.

Contrary to a pension policy aimed at building up private savings, the measure seems to discourage long-term investments in this type of product, and perhaps an implicit move to strengthen public pensions to the detriment of private ones, or just to increase the federal public budget, seeking merely palliative and short-term fiscal measures.