Portuguese 
English 
Spanish 
5 min of reading 
0 comments 
The New Tax Reform Reorganizes Consumption Taxes, Replaces Five Taxes with a Dual Model, Requires Technological Adaptation in Companies and May Alter Prices for Consumers, with Gradual Implementation and Focus on Simplification, Neutrality and Transparency
The new tax reform is the result of a long-term process that brought together civil society and Congress. The overall design is technically inspired by the Center for Fiscal Citizenship, with the prominent role of economist Bernard Appy, and gained political traction through PEC 45 in the Chamber and the final report in the Senate. During the process, Baleia Rossi, Aguinaldo Ribeiro, Eduardo Braga and the Ministry of Finance played decisive roles in consolidating a text aimed at simplifying consumption.
In practice, the new tax reform replaces PIS, Cofins, IPI, ICMS, and ISS with a dual VAT system, creates a Selective Tax and repositions revenue collection to reduce distortions and the so-called tax war. The immediate effect for companies is to review systems, contracts and processes, while for consumers there is a promise of transparency on invoices and relief on essential items, with a phased transition until the full adoption of the new regime.
Who Idealized It and Why the Proposal Advanced
The central proposal was modeled within the Center for Fiscal Citizenship, with Bernard Appy as the intellectual reference. In the Chamber, Baleia Rossi signed PEC 45 and Aguinaldo Ribeiro acted as rapporteur, conducting negotiations with economic sectors and party caucuses. In the Senate, Eduardo Braga refined the text with adjustments to federal design and regional development mechanisms. The economic team of the government prioritized advocacy for voting, defending simplification and competitiveness.
-
The Senate approves a bill that criminalizes misogyny, hatred, or aversion towards women, and includes the crime in the Racism Law with a penalty of up to 5 years.
-
Chamber Approves Bill That Allows Pepper Spray for Women Over 16 and Imposes Strict Rules for Purchase, Possession, and Use as Self-Defense
-
Chamber Approves Law to Combat Leucaena, Fast-Growing Plant That Dominates Land and Threatens Native Species in Various Regions of the Country
-
Asset Division: Know What Cannot Be Divided in Case of Divorce
The motivations converge on three pillars. Simplification and efficiency to reduce the Brazil Cost, economic neutrality through non-cumulativity, and transparency by making the tax burden evident on invoices. The aim is to bring Brazil closer to international VAT practices, improve the business environment, and provide regulatory predictability for investment decisions.
The design of the dual VAT introduces CBS at the federal level and IBS at the subnational level. The logic is of broad credit for inputs and services, which eliminates cumulative taxation and mitigates distortions in production chains. There will be a new electronic document layout, with specific issuance rules, and a need to reconcile accounting, tax, and technology within the same flow.
Companies must map contractual impacts. Segments that currently operate with low ISS may experience a realignment of the tax burden, while industrial chains tend to gain from credits and transparency. ERP upgrade projects, tax integrations, and data governance become critical. The transition calls for dual coexistence of regimes, testing, reconciliations, and compliance indicators throughout the phases.
What Changes for Consumers and for Public Management
The consumer will see clearly stated taxes on invoices, which favors price comparison and understanding of the tax burden. Items in the national basic basket tend to be subject to zero rate, and there is a forecast for cashback for low-income families on essential goods and services, a measure aimed at reducing regressivity and supporting basic consumption.
In public management, the IBS shifts the reference for the destination of consumption, reducing the tax war and rebalancing revenues among federative entities. The creation of a management committee for the IBS aims to standardize procedures, oversee, and mitigate disputes. The Selective Tax will apply to products harmful to health or the environment, with a disincentive extrafiscal function.
The transition is gradual. The initial period involves system tests for CBS and IBS, without effective charging at first. Then, symbolic rates will come into play as a calibration and compensation step. ICMS and ISS will gradually recede, while IBS advances until consolidation. In the end, PIS, Cofins, IPI, ICMS, and ISS will be entirely replaced.
From a technological standpoint, the agenda includes reengineering of registrations, tax parameterization, credit validation, audit trails, and integration with official databases. End-to-end tests need to simulate sales, returns, services, and interstate operations, with governance of changes and contingency plans.
Expected Benefits and Identified Risks
Among the benefits, regulatory simplification, reduction of bureaucracy, wide non-cumulativity, and transparency stand out. The industry is expected to gain competitiveness due to reduced cascading effects and recovery of credits in the chain. The destination logic seeks to correct location distortions and rationalize incentives.
The risks focus on adaptation costs, complexity of the transition, and potential realignment of the tax burden in the services sector. The aggregate standard rate of the new VAT may be high, requiring fine calibration to avoid price pressures and ensure revenue neutrality. Effectiveness also depends on complementary laws detailing regimes, reduced rates, and operationalization of cashback.
In the services sector, the migration from ISS to the dual VAT may increase the tax burden in some niches, requiring revision of prices, contracts, and portfolios. On the other hand, essential services such as education, health, and public transportation are expected to have reduced treatments, subject to complementary regulation.
In industry, the elimination of cumulative taxation improves pricing, exports, and investments. In subnational operations, the end of the tax war alters location matrices and incentives, necessitating viability analyses and possible logistical restructuring. Sectors with intensive input tracking and credit management should prioritize data auditing and reconciliation to capture the expected gains.
How Companies Can Prepare Now
The adaptation plan should start with a tax and technological diagnosis. Mapping purchase and sales flows, identifying cumulative taxation points, reviewing economic clauses of contracts, and prioritizing ERP and tax middleware projects are immediate steps. Training of fiscal, accounting, IT, and legal teams supports the cultural shift.
It is advisable to establish a transition committee with goals, a timeline, and compliance indicators. Scenario simulations, credit tests, pricing rules, and communication with customers and suppliers reduce friction and support price adjustments when necessary. Engagement with sectoral entities and monitoring of complementary laws complete the governance.
The new tax reform combines structural redesign of consumption, an agenda of fiscal digitalization, and a lengthy transition that requires preparation. Success depends on technological execution, legal security, and sector calibration to avoid undue transfers and capture efficiency gains. For consumers, the promise is more transparency and protection of essential items, while companies need to turn compliance into a competitive advantage.
In your operation, how much will it cost to adapt systems and processes to the new tax reform and where will the impact be most sensitive, in price, margin or technology? Who should lead the transition in your company and why? Share your reality in the public or private sector so we can understand concrete effects on consumer prices.
-
-
-
-
-
20 pessoas reagiram a isso.