THE TRANSITIONAL REGIME OF THE BRAZILIAN TAX REFORM: CHALLENGES AND PERSPECTIVES OF EC 132/2023 AND LC 214/2025

Abstract

This paper examines the transition regime of Brazil’s tax reform introduced by Constitutional Amendment No. 132/2023 and operationalized by Complementary Law No. 214/2025, focusing on the implementation stages of the new consumption tax model and the main federative, economic, and social challenges arising from the gradual shift to the new system. The study aims to understand the constitutional timeline (2026–2033), the regulatory role of the complementary law in providing operational substance to the Goods and Services Tax (GST) and the Social Contribution on Goods and Services (CBS in Portuguese), and the institutional relevance of the IBS Management Committee for interpretive uniformity and coordinated collection under shared taxing authority. A qualitative methodology is employed, combining bibliographic and documentary research through normative analysis of the constitutional and infraconstitutional provisions addressed in the text, alongside selected doctrinal perspectives to discuss the breadth of the taxable event concept, the tension between national coordination and subnational autonomy, and the effects of destination-based taxation in curbing fiscal competition among states. The paper also addresses the distributive dimension of the reform, notably simplification, tax fairness, and instruments intended to mitigate regressivity in consumption taxation. It concludes that the gradual transition functions as a mechanism for predictability and institutional adjustment, while interpretive disputes, federative governance constraints, and the effectiveness of distributive correction tools remain critical issues.