President Luiz Inácio Lula da Silva’s economic team is discussing rates for the new tax with affected industries and weighing a constitutional amendment against a provisional measure. The government expects to announce its decision after the October 25 election runoff.
CNN Money, citing sources, reported that officials plan to meet representatives of affected sectors in the coming days. Under the constitutional amendment option, the government would seek wording that exempts the tax from the 90-day waiting period between publication and collection.
The alternative is to set the rates through a provisional measure. In that case, the 90-day rule would apply, meaning collection could not begin on January 1, 2027. The government plans to settle on a mechanism after consultations.
Officials want any agreement with the industries to remain in place regardless of who wins the presidential runoff. The Ministry of Planning and Budget estimates the Selective Tax will bring in 41.9 billion reais in 2027, or roughly 3.5 billion reais a month.
If collection does not start on January 1, projected revenue in next year’s budget could be lower. The tax was created as part of Brazil’s tax reform to discourage consumption of goods and services deemed harmful to health or the environment.