Selective Tax has its next steps defined by the Government.

Is there any topic within the Tax Reform more debated than the Selective Tax?

Targeting goods and services deemed harmful to health or the environment, this tax has a clear objective: to discourage such consumption.

That is why it operates on a logic quite different from that of the VAT (Value-Added Tax). While the VAT aims for neutrality—featuring few tax rates and minimal interference in consumer choices—the Selective Tax exists precisely to influence that behavior.

The sectors affected were the subject of extensive discussion in Congress. Alcoholic beverages and cigarettes were expected targets from the start of the process. Over the course of the debates, vehicles, minerals, sugary drinks, and sports betting were also included.

According to Daniel Loria, a partner at Loria Advogados, understanding how each tax rate will be calculated—and its effect on the final consumer price—will be crucial to gauging the real impact of the Selective Tax starting in 2027.

For more details, click here to read the full article in Valor Econômico (subscription required).

Loria Advogados closely monitors every detail of the Tax Reform.