BRAZILIAN TAX REFORM: ANALYSIS OF CHANGES, CONCRETE DATA, AND IMPACTS FROM 2026 ONWARDS

Abstract

The tax reform approved by Constitutional Amendment No. 132/2023 and regulated in 2025 establishes a new taxation model in Brazil, particularly regarding consumption and income tax progressivity. Beginning in 2026, the transition replaces five existing taxes (PIS, COFINS, IPI, ICMS, and ISS) with a dual Value Added Tax (VAT) system, consisting of the federal CBS and the state/municipal IBS. This article analyzes official data and recent studies concerning expected macroeconomic effects, federal challenges, regressivity risks, and operational demands. It concludes that although the reform has strong potential for simplification and efficiency gains, its success depends on careful implementation and adequate compensatory measures.