Brazil's Consumption Tax Reform Targets Simplification Without New Levies

A tax‑law specialist clarified that Brazil's new consumption tax reform does not introduce additional taxes. Lucas Ribeiro, CEO of ROIT, said, “A reforma tributária do consumo, por premissa e por desenho constitucional, não traz um aumento do que já se tem hoje,” emphasizing that the plan replaces existing taxes with a streamlined model rather than raising rates.

The reform, enacted by Constitutional Amendment 132/2023, consolidates five taxes (ICMS, ISS, PIS, Cofins, part of IPI) into a dual Value‑Added Tax (IBS) shared by states and municipalities, and creates a federal Contribution on Goods and Services (CBS). It shifts tax collection to the place of consumption, alters revenue distribution among federative entities, and aims to reduce fiscal distortions, administrative costs, and the “tax war” between states. The change was presented to municipal officials in Santarém, Pará, highlighting its expected impact on fiscal planning, technology upgrades, and revenue sharing criteria.