OPINION. To the winner, the rates. To the taxpayer, inflation
"To the winner, the potatoes," Quincas Borba used to say. After the furor of the electoral turnaround, the time has come for the new government to deal with a legacy that it will hardly describe as cursed, but already recognizes as complicated. A large part of the stock of potatoes that will need to be peeled lies in the most disruptive change in the history of the Brazilian tax system, the…
Brazil's new government is set to deal with a complicated inheritance from its predecessor, particularly with the implementation of the Tax Reform starting in 2027. The reform aims for tax neutrality, but concerns have arisen as the Tribunal de Contas da União (TCU) calculated a 11.3% reference rate for the CBS, a part of the new IVA tax, which is higher than previously promised.
This could lead to a combined tax rate of over 30%, and potentially 34% if the same deviation occurs in the IBS tax. The government's promise of tax neutrality has raised questions about its calculation, who bears the burden, and when the effects will materialize.
Written by urgent.news from Brazil Journal's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
