That of goods and services is not just a rearrangement of the system: it represents an internal transformation of Brazilian companies, a structural change that will affect finance, operations, technology, people and governance.
The debate on tax reform is usually presented in technical terms, such as rate changes, impacts on productivity and the business environment, new taxes and simplification.
It will certainly be a tax reform, the most important in the last 50 years in Brazil. But, above all, it will be a reform of how companies work. And how we understand the difference that different leadership styles can make for the future of their organizations.
From 2026 onwards, Brazil will begin the transition towards broad financial credit, taxation at destination with uniform tax bases and more standardized rules. Simplification, however, does not eliminate implementation complexity. On the contrary: it shifts the challenge within organizations. And that is why the next few years will be decisive.
The first impact is technological. Internal systems will have to be reprogrammed, counting engines rebuilt, records adjusted, controls automated. The new model requires precision: credit is automatic, the invoice becomes more intelligent, and the tax can be collected through the split payment mechanism, in which the tax part of the payment goes directly to the government. This reduces tax defaults, compliance failures, but increases dependence on reliable systems.
In the past, tax risk came from interpretation. Now it is born from operational or even technological failure.
Another profound impact is on financial logic. The reform changes relative prices, redistributes competitiveness between sectors and alters margins that previously seemed stable. With greater alignment of taxation between goods and services, industrial companies tend to recover efficiency; Service sectors tend to face tax pressure. Pricing will need to be reviewed line by line, and performance indicators such as EBITDA (operating margin) and ROIC (return on invested capital) will have to be recalibrated.
Furthermore, cash flow will be redesigned. Split payment removes part of the flexibility that existed in the previous model from companies’ cash. There will be more credits accumulated at the beginning of the transition and more need for working capital planning. The financial sector is already beginning to anticipate this shift, which could accelerate mergers and acquisitions as a way of dealing with this legacy.
At the operational level, the reform must reorganize supply chains and logistics structure. Without predatory tax war, location decisions stop being tax and become economic again. Industrial plants, distribution centers and partnerships with suppliers will need to be reevaluated. Reorganization may generate short-term costs, but tends to increase structural efficiency. States and municipalities will be able to remodel their incentives which, if they continue to make sense, will have to pass through public budgets in the form of subsidies, financed by the new regional development funds.
All of this requires new skills. Tax professionals need to be quickly prepared to understand data, technology, automation and operations. The fiscal area ceases to be an interpretative protocol and becomes a technical-operational system, integrated with information technology (IT), finance and operations.
The central question, therefore, is not “what does the reform change?”. And, yes: “Are we aware of the challenges and prepared to operate the new model?”
And here comes the role of internal governance and Boards of Directors.
Tax reform is a governance issue; not because Boards must master its technical details, but because the magnitude of change requires strategic coordination, risk oversight, executive prioritization and extreme care for stakeholders. And all this in a cycle with extremely high capital costs and immense challenges in its allocation.
It is the Councils that must guide the company to review its pricing and margin structure; be technologically ready by 2026; assess financial risks of the transition; reexamine contracts and supply chain dependencies; prepare your teams to operate with new systems and rules. And, finally, redefine your medium-term value generation strategy in the face of new relative prices and different compliance and supplier relationship challenges.
A transition of this scale cannot be delegated. It requires vision, alignment and the ability to execute. There are three that directly depend on the quality of governance.
In the end, the tax reform will be a huge test for Brazilian companies. Some will emerge stronger: with more efficient operations, more robust controls, a clearer cost structure and less legal fragility (fewer litigation). Others, less prepared, may face margin losses, operational disruptions, cash flow difficulties and reputational risks.
The difference between one path and another will be less in the reform itself and more in the capacity for internal organization, as well as the objectivity of the actions of Executives and Councils.
Tax reform will change companies. And it will be companies, as a whole, that will be able to change Brazil and remove it from the rankings of the most complex, litigious and inefficient tax systems on the planet.
The transition will be very complex for business. But, if we are successful in this endeavor, in a few years, our companies will be more efficient and competitive; your clients or consumers will have a more transparent view of the tax burden they pay; investors will have a more positive view of the business environment; and the country will potentially grow more, in a more sustained manner.
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