Brazil implements tax reform and regional debt settlement programs

Brazil is undergoing a major tax reform that will replace several current taxes, such as ICMS and ISS, with new levies (CBS and IBS) by 2033. This transition includes structural changes like the 'split payment' mechanism, which automatically separates tax amounts from sales during electronic transactions to reduce fraud and improve credit efficiency.

In conjunction with these systemic changes, various municipal and state governments are offering tax regularization programs (Refis). These programs allow individuals and companies to settle outstanding debts with significant discounts—often up to 100% on interest and fines—through single payments or installments. Examples include initiatives in Goiás, Santa Cruz do Capibaribe, Araxá, Caraguatatuba, Arapongas, and Campinas.

Furthermore, federal legislation (PLP 124/2022) is advancing to address the high volume of tax litigation, which accounts for a significant portion of pending judicial processes. The bill aims to introduce mechanisms like mediation, arbitration, and consensual settlements to resolve billion-real disputes more efficiently and reduce the long-term legal uncertainty affecting the business environment.