Provisional measure sets 'sin tax' rates, to be collected starting in February 2027
Beer will be taxed at 4.2%, wine at 8% and spirits such as whiskey and vodka at 24%; the new levy replaces the IPI tax on harmful products
Translated from the Portuguese original by the Panorama newsroom. Read in Portuguese
Summary written by the Panorama newsroom from the sources listed below. Facts are attributed to the original publications.
A provisional measure published in the Official Gazette on Wednesday night (4) set the rates of the Selective Tax, nicknamed the 'sin tax', and scheduled collection to begin on February 2, 2027, g1 reported. Because the tax is subject to a mandatory 90-day waiting period, it can only take effect 90 days after publication.
Created by the consumption tax reform, the tax applies to products considered harmful to health or the environment, as well as some vehicles, mineral extraction, lotteries and betting. Among beverages, sugary drinks will pay 2.6%; malt beers, 4.2%; wines and sparkling wines, 8%; rum and cachaça, 20%; and whiskey, vodka, gin and tequila, 24%. For cigarettes, the rate will be 66.7% plus R$3.50.
For vehicles, rates will follow sustainability and energy-efficiency criteria. Some groups will have a zero rate, such as cars bought by people with disabilities or with autism spectrum disorder and by taxi drivers. Trucks with a gross weight of 3,500 kilograms or more, except pickups, are exempt.
Finance Minister Dario Durigan said the new tax will replace the IPI (federal tax on industrialized products) currently levied on these goods and that the measure was negotiated with the affected sectors to keep the current tax burden in 2027. Until February, the IPI will continue to be collected. The economic team expects to raise R$41.9 billion from the tax next year.
Under the measure, the government has until May 31, 2027, to send Congress a bill with the permanent rates, which will apply from 2028, when the intention is to raise taxation to discourage consumption. The provisional measure is valid for up to 120 days and must be approved by the Chamber of Deputies and the Senate or it will expire.