The sector that represents the distilled beverages market and will be directly affected fears that the current rates will be maintained and that the discussion will be carried out in a short period of time before they come into effect.
The new tax will apply to products that are harmful to health, such as tobacco and alcohol, but the rate still needs to be defined by the government and regulated by the National Congress.
The political wing of the Lula government started to consider the possibility. This is because a possible tax increase could directly impact the voter’s vote.
The big problem is that, to come into effect in 2027, the proposal needs Congressional approval this year. If this is delayed after the election, the process in Parliament would take less than two months.
Last week, the Minister of Finance, said that he would call the sectors for a conversation to define the rates, but suggested that he could maintain what is charged today as IPI (Tax on Industrialized Products).
For the sector, maintaining the current stage will only replicate the distortions that already exist, favoring certain drinks. Today, while on distillates it reaches almost 20%.
The Brazilian Association of Distilled Beverages advocates that the charge should be applied to the price of the product and the volume of alcohol.
“The hybrid model is what best meets the objective of the IS. Thus, each milliliter of alcohol is taxed in the same way, regardless of the type of drink — and naturally, those who have more alcohol pay more, those who cost more, pay more”, said the president of ABBD, Eduardo Cidade.
The position is the same as that defended by the National Health Council which, in 2024, recommended that the Selective Tax not vary according to the alcohol content of the drink.
In the recommendation, the agency says that this would significantly reduce the impact on alcohol, which is responsible for 90% of alcohol consumption in the country.
ABBD says it has not yet been called, but is waiting for a conversation with the Minister of Finance, which should probably take place in early July after he returns from his trip,
“Any proposal outside of this protects the category that accounts for 90% of consumption and sends a message to society that certain drinks are less harmful. The IS needs to be consistent with what it proposes”, concluded Cidade.
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