Ecological Transformation in the context of the Tax Reform

The Tax Reform approved in 2025 is a historic milestone for the Brazilian economy awaited for 40 years. The tax system – considered one of the most complex in the world – will now be one of the most modern, digitized, and automated.

The new tax model fully exempts exports and investments, incentivizes higher value-added and advanced technology products, and promotes the creation of skilled jobs. In addition, it establishes tax advantages for sustainable and healthy products, guiding production and consumption towards a new economy that combines the three objectives of the New Brazil:

Banner - Production with more added value and technology, skilled jobs

Banner - Income Distribution and a Fair Transition Towards Climate Neutrality

By regulating the first phase of the reform, focused on consumption, we have already made the following progress:

Skilled jobs and Increased Productivity

Investments in machinery, equipment and production facilities will be tax exempt
End of cumulative and cascading taxation, benefiting more complex and industrialized products
Simplified, digitized and automated tax system, reducing paperwork and litigation costs

Sustainability and Promotion of Green Economy

Excise Tax (IS) (a selective or sin tax) on products and processes harmful to the environment and to public health
Tax incentives for biofuels, helping to reduce carbon emissions
Support for the circular economy, with credit line for companies that buy recyclable materials from cooperatives and waste pickers
60% reduction in the standard tax rate for forest products and environmental services, encouraging the restoration of forests and other biomes

Reducing Inequalities: Cashback and Zero Tax on the Food Basket

Tax cashback for low-income families, benefiting 73 million people, including 55% of early childhoodsmall children
Zero tax on food basket products
Tax reduction to 60% on essential items such as hygiene products, medicines, hospital and laboratory services

Next Steps in the Tax Reform

In addition to the progress already secured with Supplementary Law No. 214, the next steps in the reform will guarantee:

Definition of the rates of the Excise Tax (IS), which will be levied on goods and services that are harmful to health and the environment.
Creation of Sustainability Funds for the State of Amazonas, the States of Western Amazonia and State of Amapá.
Implementation of the National Fund for Regional Development (FNDR), guaranteeing support for the regions during the transition.

The reform transition begins in 2027 for federal taxes and 2029 for state and local taxes, to be completed in 2033.

With a fairer, more efficient and more sustainable tax system, Brazil is taking a decisive step towards a more prosperous future in line with the green economy.

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