Brazil tax reform rollout raises compliance hurdles for firms and farmers

On 1 August 2024 Brazil’s tax reform entered its first phase, requiring companies to meet new accessory obligations and imposing penalties for non‑compliance. The change forces firms to upgrade operational processes, integrate technology systems and ensure data accuracy across tax classifications, invoicing and credit calculations. The transition will last until 2033, during which businesses must operate under both the existing tax regime and the new consumption‑based taxes, creating a complex dual‑tax environment that can affect efficiency and expose firms to higher fiscal risks.

Finance Minister Dario Durigan announced that talks with sectors affected by the forthcoming selective tax will begin next week, but the definition of its rates will be postponed to avoid a “political war” ahead of the 2026 elections. He said the overall tax burden will stay unchanged for 2027, with the selective‑tax debate deferred to 2028. The delay leaves agribusiness operators without clear cost forecasts, hampering cash‑flow planning, input negotiations and long‑term investment decisions. Legal experts warned that the lack of predictability could strain producers, especially amid low commodity prices and narrow margins.