Brazil wealth concentration remains high despite falling income inequality

Recent data and reports highlight a complex economic landscape in Brazil, where income inequality is decreasing while wealth concentration remains extremely high. According to IBGE, the Gini index fell to 0.504 in 2024, the lowest in its historical series, aided by rising labor income, lower unemployment, and social transfer programs. Poverty rates also declined, with 8.6 million people moving out of poverty between 2023 and 2024.

However, an Oxfam Brasil report titled ‘A Portrait of Brazilian Inequalities: Power, Privilege, and the Capture of Democracy’ warns of a ‘farce of progressivity’ in the tax system. The study reveals that while the working class faces nominal tax rates of up to 27.5%, the super-rich—representing 0.01% of the population—paid an effective real tax rate of only 4.6% in 2023. This disparity is attributed to legal protections for capital income, such as tax-exempt profits and dividends, which account for 34.9% of declared exempt income. While income indicators show improvement, the concentration of accumulated wealth and assets remains a significant structural challenge.