The Evolution to Bill 68/2024.

Over the decades, the overlapping of taxes, lack of simplification, and fiscal competition between states and municipalities have created a tax system that is widely considered one of the most complex in the world. Several attempts at reform have been made over the years, but none have been able to solve the system’s main problems, such as the high tax burden, excessive bureaucracy, and federative disputes.

Bill No. 68/2024 proposes a radical change in this scenario, unifying taxes and simplifying the tax collection process. The proposal aims to create a Goods and Services Tax (IBS), which would replace ICMS, ISS, IPI, PIS, and COFINS, providing a fairer, more modern, and efficient system. This book will examine this reform in detail and its potential impacts on Brazil, both economically and socially.

Comparison between the Current Tax System and Bill 68/2024.

The Brazilian tax system, marked by a diversity of taxes and contributions, has evolved over the decades with the creation of taxes such as ICMS, IPI, ISS, PIS, COFINS, CSLL, and IRPJ. These changes reflected the economic needs of each period but also made the system increasingly complex and burdensome. Bill 68/2024 proposes a break with this model, aiming to simplify the tax structure through the creation of a Goods and Services Tax (IBS), which unifies various taxes and adopts a more modern rate system.

ICMS vs. IBS.

ICMS stands out for its complexity due to varying interstate and intramunicipal rates, as well as the “fiscal war” between states. Currently, rates vary from 12% to 25%, depending on the state and type of goods or services, which creates distortions in the system. Bill 68/2024 proposes replacing ICMS with IBS (Goods and Services Tax), which will have a single rate for each federal entity, promoting greater simplicity and eliminating disputes between states. By unifying rates, the goal is to create a more competitive and efficient business environment.

IPI vs. CBS.

IPI, historically used as an industrial and economic policy tool, has rates that range from 10% to over 30%, depending on the product. Bill 68/2024 absorbs IPI into CBS, eliminating regulatory specificities and standardizing taxation on industrialized products. This change aims to simplify tax incidence, reducing the bureaucratic burden for companies, while seeking to boost the competitiveness of national industry without the need for frequent rate adjustments.

ISS vs. IBS.

ISS, a municipal tax, will also be integrated into IBS. Today, ISS rates range from 2% to 5%, depending on the service and municipality, which creates difficulties for companies operating in multiple cities. Bill 68/2024 proposes a single rate system for services, eliminating the multiplicity of local rules and standardizing collection at the national level. This measure aims to facilitate the lives of service companies and reduce fiscal fragmentation...