🚨 12 key points no one is talking about regarding Brazil’s tax reform

Hey, I’m Douglas, Editor-in-Chief of the Brazilian Tax Reform Portal 🇧🇷 — and I’m here to raise another red flags. 🟥

The exemption on meat, the so-called “sin tax,” and the standard VAT rate have dominated Brazil’s national debate around tax reform in recent months. However, the approval of Constitutional Amendment 132/2023 and its accompanying regulatory bills will have far-reaching impacts on businesses—affecting everything from procurement processes to contract management and enterprise systems.

In this edition, we interviewed ROIT’s CFO, Caroline Souza, and outlined 12 critical points that demand your attention and can help your business stay ahead of the curve in the coming months:

1. Cash flow pressure 🐄

With the shift to a new tax system, companies must assess whether they’ll need more cash on hand over the coming years and where additional investments will be necessary.

Preparing working capital becomes critical to securing credit at the lowest possible cost. The new tax structure will impact purchase prices and increase upfront cash requirements on acquisitions. Proactively planning for this cash need can help avoid unpleasant surprises. This also means considering new credit lines, adjusting financial reserves, and rethinking your cash conversion cycle—possibly extending payment terms with suppliers while reducing collection periods from customers.