Brazil implements consumption tax reform and small business procurement initiatives

Brazil is undergoing a significant transition in its tax system, focusing on consumption-based reforms. During the XIX National Meeting of ANFIP in Rio de Janeiro, tax auditors detailed the implementation of the new tax model established by Constitutional Amendment No. 132 and Complementary Law No. 214/2025.

The reform introduces three new taxes: the Goods and Services Tax (IBS), the Contribution on Goods and Services (CBS), and the Selective Tax (IS). The transition is designed to be gradual, with a testing phase beginning in 2026 to ensure simplicity, transparency, and tax justice.

In Pernambuco, discussions have also centered on how these tax changes and new public procurement tools will impact small businesses. The Sebrae has established a state committee for the Contrata+Brasil platform, which aims to facilitate access for micro-entrepreneurs and family farmers to government contracts. The platform has already facilitated R$ 75 million in contracts nationwide.