# Brazil tax reform and industrial competition

> Live situation record from CLSTR: https://clstr.news/situations/brazil-tax-reform-and-industrial-competition
> Updated: 2026-09-30T08:00:27.000Z. Sources: 9. Developments: 4.

In early September 2026, Brazilian business leaders and industry specialists began addressing the strategic impacts of tax reform. In Brasília, the automotive supply chain focused on legislative agendas and legal security, while in Bahia, discussions centered on how reform affects asset protection and family succession planning for regional companies. By late September, the focus shifted toward the implementation of specific legislative changes and their broader economic consequences. Law 14.754/2023 has effectively dismantled traditional tax-deferral models by taxing profits from offshore entities in privileged tax regimes annually. Concurrently, domestic industries are facing increased pressure from foreign imports, particularly from China. While China has moved to ban certain subsidies to prevent “involutive competition,” Brazilian sectors such as clothing, footwear, and toys are struggling with tax imbalances caused by the removal of import duties on low-value purchases. Despite anti-dumping measures on certain goods like tires, imported products continue to impact local production and employment. At the Aço Brasil 2026 Congress, industrial leaders reinforced the importance of these changes. Gerdau CEO Gustavo Werneck described the tax reform as a significant initiative to boost industrial competitiveness and GDP growth. Adding to the critique of the current fiscal landscape, economist Marcos Troyjo characterized Brazil’s high tax burden as an “autotarifaço” (self-imposed tariff), noting that the country’s 33% tax-to-GDP ratio exceeds that of competitors like India and Mexico. On the diplomatic front, Minister of Development, Industry, Commerce and Services Márcio Elias Rosa signaled a firm stance during G-20 trade discussions in the United States, stating Brazil will not negotiate on sovereignty-sensitive issues. He also called for a review of U.S. tariffs affecting Brazilian machinery, wood, and footwear. By the end of September, the aviation sector emerged as a new front in the reform debate.

## Timeline

### 2026-09-30: Brazil aviation sector seeks tax reductions to offset reform impacts

Brazilian airlines are seeking a 40% tax reduction on fuels and operational inputs to combat rising ticket prices and potential drops in passenger demand caused by upcoming tax reforms.

3 sources. https://clstr.news/cluster/brazil-aviation-sector-seeks-tax-reductions-to-offset-reform-impacts

### 2026-09-29: Brazil industrial leaders urge tax reform and trade protections

Brazilian leaders and economists highlight the need for tax reform and trade protections to boost industrial competitiveness against high domestic tax burdens and international tariff pressures.

2 sources. https://clstr.news/cluster/brazil-industrial-leaders-urge-tax-reform-and-trade-protections

### 2026-09-27: Brazil implements new offshore tax laws amid import competition concerns

Brazil is implementing new tax laws targeting offshore holdings while facing domestic industry pressure from foreign imports and tax imbalances affecting market competition.

2 sources. https://clstr.news/cluster/brazil-implements-new-offshore-tax-laws-amid-import-competition-concerns

### 2026-09-03: Brazilian business sectors address tax reform impacts

Brazilian business entities are analyzing the impacts of tax reform on the automotive supply chain and the necessity of family succession planning for asset protection.

2 sources. https://clstr.news/cluster/brazilian-business-sectors-address-tax-reform-impacts

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Cite as: Brazil tax reform and industrial competition. CLSTR, https://clstr.news/situations/brazil-tax-reform-and-industrial-competition