Brazil tax reform implementation sparks calls for clarity

Economic sectors in Brazil are calling for greater clarity and predictability regarding the implementation of the new tax reform. Business representatives have expressed concerns over the definition of tax rates, system adaptation, and the complexity of new obligations, particularly regarding cash flow and corporate planning.

The National Confederation of Industry (CNI) has highlighted concerns regarding the Selective Tax (IS), which will apply to products deemed harmful to health or the environment. CNI President Ricardo Alban emphasized the need for rapid regulation to allow industries to plan investments for 2027. Additionally, the Confederation of Commercial and Business Associations of Brazil (CACB) noted potential impacts on cash flow caused by the split payment mechanism.

For micro and small businesses, the transition to the Goods and Services Tax (IBS) and the Contribution on Goods and Services (CBS) presents a choice between remaining in the Simples Nacional regime or migrating to a hybrid regime. To assist this transition, a proposal for assisted assessment has been discussed, which aims to integrate fiscal document information directly into tax systems to reduce manual labor and automate declarations.