Tax increase on sugar-sweetened beverages approved and reduced on health foods

The National Congress approved the basic text of the Complementary Bill (PLP 68/24) which regulates Constitutional Amendment 132/23 (“Tax Reform”) and institutes the Goods and Services Tax (IBS), the Social Contribution on Goods and Services (CBS), the Selective Tax (IS in Portuguese) and creates the IBS Management Committee.

The Selective Tax (IS) will be applied to products considered harmful to health and the environment. The aim is that the surcharge - popularly known as the “sin tax” - will discourage the consumption of these products.

Specific tax rates for tobacco, alcohol and soft drinks will be determined in 2025, but they will have to be high enough to dissuade consumers from buying these products to have an impact on health.

In addition, taxes on horticultural and minimally processed products, including crustaceans, dairy products, honey, flour, cereals, pasta, juices, bread, nuts and fruit, have been lowered by 60%.

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