- The PEC 45/2019, proposing tax reform, was approved in the legislative house on July 7, 2023.
- The reform aims to replace five taxes with two international standard value-added taxes (VAT) with uniform legislation for simplicity and homogeneity.
- The transition period will take eight years, starting in 2026. The reform will end the practice of taxing over taxes, making the production chain more expensive and hindering the competitiveness of the Brazilian economy.
- The five taxes to be replaced are PIS, Cofins, IPI, ICMS, and ISS. The two new VATs are IBS and CBS. A Selective Tax will also be created to discourage harmful consumption.
- Current taxes will be phased out by 2033, and essential goods and services will have reduced rates.
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