🧾 28%-ish VAT

Happy Friday! Brazil has already confirmed four deaths from dengue fever in 2025, with another 62 under investigation. In Wednesday’s Brazil Daily newsletter, we explored how the country is seeking to avoid yet another massive dengue epidemic this year.

What’s next for Brazil’s landmark consumer tax reform

President Luiz Inácio Lula da Silva on Thursday enacted a law regulating Brazil’s consumer tax reform — a significant step in the effort to modernize and simplify the country’s complex tax system. Yet the journey is far from over: additional legislation still requires approval, and the reform’s full implementation is not expected until 2033.

Macro. The tax reform consolidates five multi-level consumption taxes into two value-added levies: the state- and municipal-level IBS and the federal-level CBS. After decades of debate, the core framework was approved and enshrined in the Constitution in 2023. Late last year, Congress passed the first bill detailing the new system’s regulations (which Lula enacted).

• The president fully or partially vetoed 15 articles (out of 544), citing conflicts with the Constitution. Among the rejected provisions were those granting tax exemptions to investment funds and mineral exports included in the “sin tax” category (which causes harm to the environment and/or human health).

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