🇧🇷 Tax reform: Tobacco, fule and agribusiness

Hey, I’m Douglas, Editor-in-Chief of the Brazilian Tax Reform Portal 🇧🇷.

In recent days, we have had several conversations with heads of major companies in Brazil, from sectors such as tobacco, fuels, and agribusiness. Below, you can find the key insights.

1) Tobacco sector 🚬

Juliana Paranhos, Head of Tax at  BAT Brasil, stated that if the Selective Tax raises the price of tobacco to the point of making it unaffordable for consumers, there is a risk of migration to the illegal market, such as that of smuggled products from Paraguay, for example:

"These products pay zero tax in Brazil. We always arrive here at a much lower price than ours. This is automatically the migration that consumers will make. There is a huge imbalance," she stated during a live broadcast on the Tax Reform Portal about the tobacco sector.

Calculation basis

The industry is concerned about defining the tax base for the Selective Tax. Although progress has been made in defining this, there is still uncertainty about how the tax will be applied: whether it will be ad valorem (a percentage of the value) or ad rem (a fixed amount) (read more)

2) Fuel sector ⛽️

Daniel Mascareñas, Head of Tax at Ale Combustíveis, stated that he is treating 2026 as the beginning of a real adaptation to the new tax model, not just a testing period. He adds that "the key will be turned overnight," even with a series of regulations involving standard and specific tax rates:

"I'm quite convinced that 2026 will be a very aggressive year, full of activities, but it will be a very important year, without a doubt," he said.

Impacts on the sector

Daniel explains that tax reform should reduce tax evasion, which occurs primarily among smaller distributors, who import Naphtha disguised as fuel to pay less taxes, selling the product without converting it into gasoline, as required:

"In my view, tax reform will significantly reduce tax evasion in this market, penalizing and holding the next level in the chain accountable, under penalty of fines and infraction notices" he said (read more)

3) Bayer 💼

Jailson Evangelista, Tax Business Partnering Manager at Bayer, stated during the Portal's live industry session that companies need to be proactive, especially considering Bayer's size.

He says that "we can't wait" to work on implementing the reform, whether waiting for new parts of the regulation or waiting for other large companies to move forward.

"We have to take the text of the supplementary law and see how it affects us, and then try to adjust. We may have to work more on agile issues later in the day: with more turn-on, turn-off options. Because at the end of the day, I have to have it ready, but at the last minute, if something changes, especially with everything we're discussing, we can make that adjustment more quickly." (read more)

4) Agribusiness 🌾

Wesle Pessoa, tax planning manager at Amaggi, one of the largest multinational agribusiness companies, highlighted that obtaining registration as an Authorized Economic Operator (OEA) has a significant impact on the agribusiness sector, especially for trading companies, by allowing tax-exempt purchases. He explains that registration also reduces the accumulation of tax credits.

Wesle stated that the requirement for OEA registration is one of the aspects of the legislation that needs improvement and that, especially for companies that make purchases in the domestic market for specific purposes, obtaining registration is quite complicated. In the grain sector, for example, few companies have this benefit:

"Our entire logistics chain is quite extensive, from the producer to the bonded warehouse. Therefore, we need to have clear certification of OEA registration to be able to purchase products—soybeans and corn, in this case—tax-free," he adds (read more)

🇧🇷🔍 Brazil is changing. Are you watching closely?

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