Brazil's Finance Minister Durigan says selective tax rates to stay unchanged in 2027

Finance Minister Dario Durigan announced that the Brazilian government will propose to keep the rates of the Imposto Seletivo, known as the “sin tax,” unchanged for 2027. The move is intended to avoid a political showdown in Congress ahead of upcoming elections and to allow a smooth transition to a debate on the tax’s progressive structure starting in 2028. The tax applies to products considered harmful, such as cigarettes, alcoholic beverages, automobiles, aircraft and online gambling.

Durigan noted that maintaining the current rates will require a slight increase in the upcoming Contribuição Sobre Bens e Serviços (CBS) to offset the revenue gap, as the CBS will replace PIS/Cofins and IPI next year. He warned that political polarization makes it difficult to revisit the tax decision in Congress. A related commentary highlighted ongoing confusion among taxpayers about the tax reform, the lack of clarity on the future CBS rate and the implementation of split‑payment mechanisms, reinforcing the uncertainty surrounding the selective tax’s impact on prices and business costs.