Brazil recorded the highest tax burden (CTB) of the last 22 years in 2024. Taxes reached 32,2% do PIBwith an increase of 1.98 percentage points compared to 2023, when the indicator was 30.22%, according to data from the Federal Revenue. If no changes had been made to the indicator calculation methodology, the percentage would have reached 34.12%.
In the 2024 survey, company contributions to the Service Length Guarantee Fund (FGTS) and System S were excluded, whose resources are used to maintain learning and culture systems linked to companies, such as Sesi, Senai and Sesc.
According to the IRS, the change was adopted to align the calculation of the Brazilian tax burden with international methodological guidelines, such as those adopted by the International Monetary Fund (IMF) and by Organization for Economic Co-operation and Development (OECD).
Despite having compulsory payment for companies, the justification for the exclusion is that the FGTS does not belong to the government, but to the workers. System S resources are also not interfered with by public authorities.
To mitigate the impacts of the change and allow data to be compared over time, the study recalculated values from previous years using the new criteria. The exclusion results in a consistent reduction in tax burden levels recorded across the series.
Although the change impacts the distribution of the tax burden between the federative entities (with a reduction on two federal taxes, since both FGTS and contributions to System S fall under this heading), there is no effect on the distribution of resources, determined by participation funds and constitutional transfers.
High everywhere
Last year’s increase in taxes was mainly driven by increases in federal and state taxes, but the increase in taxation occurred at all three levels of government.
At the federal level, the biggest impact was caused by the increase in contributions to PIS/Pasep and Cofins, followed by personal income tax withheld at source (IRPF), tax on industrialized products (IPI), tax on foreign trade and corporate income tax (IRPJ) and social contribution on net profit (CSLL).
In the States, the biggest increases were due to Tax on Circulation of Goods and Services (ICMS) and Tax on Causa Mortis and Donation Transmission (ITCD). At the municipal level, the increase in Service Tax (ISS) was smaller, at 0.09 percentage points.
The historical series of the participation of federative entities in total revenue indicates a clear trend: the Union and Municipalities have been increasing their relative shares in revenue, while the States have shown the opposite trajectory, with a continuous reduction since 2021.
In 2024, the Union’s participation reached 66.14%, and that of the municipalities, 7.59% – slightly lower than the value recorded in 2023 (7.66%), the highest in the series started in 2015. The States, with 26.28%, reached the lowest level in the period analyzed.
The Revenue report also shows that, although the total Brazilian load is close to the OECD average, its composition is different. There is lower taxation on income and property in the country.
