'Sin tax': federal government defines the tax rates, which will begin to be charged in 2027

It was months of anticipation. Businesspeople needed to know the rates to prepare for 2027. The selective tax was created in 2023, with the tax reform, to tax products and services considered harmful to health or the environment. Therefore, it is also called the sin tax.

Sugary drinks, such as soft drinks, will have a tax of 2.6%. Beers, 4.2%. Cigarettes, 66.7% of part of the sales price, plus a charge of R$3.50 per pack. Motor boats, 12%. Other items, such as cars, will not have a single tax rate. The selective tax will vary, for example, according to the characteristics of the vehicle - whether it is more or less polluting.

In some cases, the selective tax rate was above the current IPI rate. For some types of wine, for example, the IPI rate is 6.5% and the selective rate will be 8%. According to the government, the IPI was used as a reference, but the percentages may be different because the IPI and selective tax are calculated in different ways.

The IPI is charged on other taxes that will be abolished with the reform, such as PIS and Cofins. In other words, it was tax on tax. In addition, the end of tax benefits and exemptions also enter the new tax rate. According to the economic team, the selective tax will maintain the current level of taxation on these products in 2027, while the government prepares a new project to calculate the selective tax from 2028 onwards.

"We agreed, here at the Ministry of Finance, with my leadership, with these sectors, with the associations, leaders of these sectors that are now affected by the selective tax, an agreement. So, this provisional measure was issued in agreement with the sectors so that we have, in 2027, a correspondence of the IPI charge that was, that exists today, and from 2027 we will discuss the permanent selective tax that would come into force in 2028 onwards", says Dario Durigan, Minister of Finance.

The tax reform calendar predicted the start of selective collection in January 2027, but, according to the Constitution, this type of collection requires a period of 90 days before coming into force, the so-called nineteen. Thus, the selective tax begins to be charged in February.

The government also published a proposed amendment to the Constitution to temporarily maintain the collection of the IPI until the selective tax collection begins, to avoid loss of revenue. The PEC does not yet have a date to be voted on.

According to the Budget proposal sent to Congress in August, the economic team estimated to raise around R$42 billion from the selective tax in 2027. This account included the collection of the selective tax on bets. With the ban on betting, the government must make a new calculation by the end of 2026.