Brazil's Selective Tax projected to raise R$ 41.9 billion by 2027

The Selective Tax, popularly known as the ‘sin tax,’ is projected to generate R$ 41.9 billion in revenue by 2027, according to the Annual Budget Law Project (PLOA) submitted to the Brazilian Congress. Established as part of the country's tax reform, the levy targets products and activities deemed harmful to public health or the environment.

The list of taxed items includes tobacco, alcoholic beverages, sugary soft drinks, certain vehicles based on pollutant emissions, mineral extraction, lotteries, betting platforms, and fantasy sports. While the tax is set to begin in 2027, the specific regulations defining its operational rules still require congressional approval.

Finance Minister Dario Durigan stated that the initial strategy aims to maintain a tax burden similar to current levels during a transition period. For sectors currently taxed under the Industrialized Products Tax (IPI), the goal is to preserve existing rates, while for betting platforms, the tax will be a new requirement. The government intends to set rates that are high enough to discourage consumption but not so high that they drive users toward illegal platforms.