Brazil Approves Tax Reform Regulation to Streamline System and Promote Tax Justice
Brazil's Chamber of Deputies has approved the regulatory framework for the 2025 tax reform, aiming to simplify taxation and promote fairness through a new unified digital system.
- • The Chamber of Deputies approved the tax reform regulation on December 16, 2025.
- • The reform introduces the Imposto sobre Bens e Serviços (IBS) replacing ICMS and ISS taxes.
- • A national digital committee, CG-IBS, will manage the new tax system.
- • ITCMD inheritance tax will be progressively adjusted to promote tax justice.
Key details
On December 16, 2025, the Brazilian Chamber of Deputies announced the approval of the regulatory framework for the country's ambitious tax reform, marking a significant step in modernizing the nation's tax system. President of the Chamber, Hugo Motta, stated that this regulatory approval represents the second phase of the reform and now moves forward to the President of the Republic for sanction.
The reform is designed to dramatically reduce bureaucracy by replacing Brazil's complex and confusing tax legislation with a unified, digital system managed by a new national entity, the Comitê Gestor do IBS (CG-IBS). One of the most notable changes is the introduction of the Imposto sobre Bens e Serviços (IBS), a tax that will replace both the state-level ICMS and municipal-level ISS taxes, simplifying the tax structure across various jurisdictions.
A key focus of the reform is enhancing tax fairness, particularly through adjustments to the ITCMD (tax on inheritance and donations), which will become progressively regulated to ensure wealthier individuals contribute more according to their means. This progressive aspect underscores the government's commitment to tax justice within the new system.
The reform’s passage responds to decades-long demands for a more efficient tax framework that lessens the administrative burden on taxpayers and government agencies alike. Motta emphasized that these changes will lead to a more streamlined, fair, and digitally managed tax collection and distribution process.
With the regulatory approval completed, the final step awaits presidential sanction, which is expected to enact the reform fully and initiate its implementation across Brazil's fiscal environment.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.
