Brazil’s Senate Constitution and Justice Committee (CCJ) approved Complementary Bill (PLP) 108/2024 on Wednesday (16), advancing another key stage in the regulation of the country’s dual value added tax (VAT) reform. The proposal was reported by Senator Eduardo Braga and received broad support from lawmakers who highlighted its expected impact on investment, productivity, and legal certainty.
The bill introduces operational and technical rules for the implementation of Brazil’s new tax framework, which replaces multiple federal, state, and municipal consumption taxes with the federal Contribution on Goods and Services (CBS) and the state and municipal Goods and Services Tax (IBS).
Senators Emphasize Economic Impact
During the debate, Senator Rogério Carvalho said the reform would significantly improve transparency and predictability for investors and businesses.
“Brazil, which is very difficult to understand from a tax point of view, begins to be clear,” Carvalho said, arguing that the productive sector is already factoring the reform into future investment decisions.
Senator Efraim Filho praised Braga’s work on the proposal and stressed that the reform must prioritize productive activity rather than government revenue collection alone.
“Tax reform should not be done to solve the government’s problems. It should be done mainly to make life easier for those who produce,” he said.
Amendments Address Disability Access and Agriculture
The rapporteur accepted several amendments during committee discussions.
One amendment proposed by Senator Mara Gabrilli guarantees IBS and CBS tax exemptions on vehicle purchases by people with disabilities. The benefit applies to vehicles worth up to R$100,000 and may be used once every three years.
Senator Paulo Paim praised changes benefiting family agriculture. An amendment introduced by Senator Weverton and accepted by Braga allows more flexible taxation criteria for the sector based on annual revenue levels.
“The amendment guarantees differentiated treatment for family farming,” Paim said. “With this amendment, we will improve the lives of thousands of workers.”
ISS Revenue Sharing Amendment Accepted
Senator Esperidião Amin successfully argued for an amendment concerning the distribution of excess Tax on Services (ISS) revenue during the transition period of the reform.
Under the original text, revenue exceeding a certain threshold would be transferred solely to the federal government. The amendment approved by Braga ensures that states and municipalities will also share those excess amounts.
“The amendment intends to remove the impression that the Union is taking money from municipalities,” Amin said during the session.
Debate Over Inheritance Tax Rules
The committee also discussed rules involving the Tax on Transmission Causa Mortis and Donation (ITCMD).
Senator Mecias de Jesus proposed an amendment seeking lower inheritance tax treatment for rural producers by placing agricultural assets in the lowest tax bracket regardless of value.
Braga rejected the proposal, arguing that the progressive system already protects smaller producers while preserving fairness in the taxation of large estates.
“The small producer is already in the first bracket. I can’t put billionaire assets in bracket one,” the rapporteur said.
High-Level Participation
The CCJ session was attended by Eduardo Paes and by Bernard Appy, the Finance Ministry’s extraordinary secretary for tax reform, underscoring the importance of the legislation for Brazil’s broader fiscal modernization agenda.
The approved bill now advances in the Senate as lawmakers continue preparations for the beginning of the VAT transition period in 2026.