Brazil tax reform targets Custo Brasil to lower logistics costs

Brazil’s logistics sector is grappling with the so‑called “Custo Brasil,” a mix of tax, bureaucratic and operational hurdles that cost the economy an estimated R$1.7 trillion a year, about 19.5% of GDP. Complex tax regimes on transport, storage and the circulation of goods raise costs and create legal uncertainty for companies, according to the National Industry Confederation (CNI).

The government’s tax reform, established by Complementary Laws No. 214/2025 and No. 227/2026, proposes a Dual IVA system that would replace taxes such as PIS, Cofins, IPI, ICMS and ISS, aiming to simplify the fiscal framework, eliminate cumulative taxes and reduce distortions that burden logistics. Legal experts say the reform could cut litigation and improve predictability, while firms will need to adjust processes and governance to comply.

A CNI survey of industrial leaders shows that reducing taxes and consolidating the tax reform rank as the top priorities for the next president, with 45% of respondents highlighting them. Other concerns include high interest rates, credit availability, labor shortages and public‑sector spending. Industry representatives, including CNI president Ricardo Alban, stress that aligning fiscal and monetary policy is essential for productive growth.