THE REGRESSIVITY OF THE BRAZILIAN TAX SYSTEM: THE ABILITY-TO-PAY PRINCIPLE AND THE PROSPECTS OF CONSTITUTIONAL AMENDMENT NO. 132/2023 IN THE INTERIOR OF AMAZONAS

Abstract

This article analyzes the chronic regressivity of the Brazilian tax system, historically anchored in heavy indirect taxation on consumption, from the perspective of the changes introduced by Constitutional Amendment No. 132/2023. The main objective is to investigate whether the transition to a Value-Added Tax and the introduction of the cashback mechanism are capable of effectuating the principle of contributory capacity, especially considering the logistical and connectivity asymmetries of the North Region. The methodology adopts the deductive method, involving bibliographical research and analysis of the new regulatory framework. The study investigates the hypothesis that the tax relief technique based on essentiality has shown flaws and that the new cashback regulation tends to assume a restrictive character, aggravated by the exclusion of products subject to the Selective Tax from the restitution base. It concludes that there is an Amazonian paradox: while the competitiveness of the Free Trade Zone was safeguarded, barriers of digital exclusion and high informality prevent the vulnerable local population from accessing the cashback. Given this scenario, the personalized refund acts merely as a palliative measure, making the advance toward a structural reform based on the progressive taxation of income and wealth unavoidable.