2026: The Dress Rehearsal for the Tax Reform

This article was originally published in Exame Magazine, in Portuguese, on September 1, 2026.

The consumption tax reform marks a turning point in the Brazilian fiscal structure, but its early days revealed the size of the “cursed legacy” we will have to overcome. Initiated on January 1, 2026, the transition will establish a new paradigm of taxation based on a dual VAT (CBS + IBS) that will replace our historical “tax madhouse” — the largest tax redesign since redemocratization. However, what we saw in the first week of January was the collision between the modernity of the law and the archaic reality of municipal infrastructure.

In this testing phase, taxpayers issue tax documents highlighting CBS (0.9%) and IBS (0.1%), but with purely symbolic rates. Joint Act No. 01/2025 established that the assessment in 2026 is merely informative, with no tax effects. There is no effective collection or fines for up to four months.

It seemed calm until slowness problems arose in the national service invoice issuance system (NFS-e), along with critical errors in municipal platforms and hundreds of companies paralyzed in their billing. The Federal Revenue Service and the newly created IBS Management Committee (CGIBS) clarified that the problem was not technological, but due to “inadequate configurations by municipalities”.

The Price of Federative Fragmentation

To comprehend the chaos, it is essential to understand that the reform is not just a change in tax rates. It is the creation of a new federative institutional architecture. Until yesterday, Brazil operated under the logic of tax fiefdoms: each of the 5,570 municipalities legislated and operated its own ISS. The result was a dysfunctional mosaic that drained national productivity.

The new Management Committee (CGIBS), approved with broad support in Congress, was born precisely to centralize this Tower of Babel. With budgetary independence and a parity-based Superior Council (27 states and 27 municipalities), it is an attempt to bring order to the chaos.

When almost 2,000 municipalities tried to simultaneously activate their agreements for the new national NFS-e standard in the week of January 5th, the system exposed our fractures. Many local entities did not even complete basic configurations. The suspension of fines until April 2026 by the Revenue Service was a sensible gesture, signaling that the focus now is educational, not revenue-generating. A clear message: “2026 is a test. Mistakes cost education, not money.”

The Desert Crossing: 2027–2033

This gives us valuable clues about the future. If the “rehearsal” phase has already generated friction, the effective transition between 2027 and 2033 will require war-room management. During this period, the old and the new will coexist.

Companies will have to maintain two parallel accounting systems — the old “madhouse” and the new VAT. This will require profound adjustments in ERPs, team retraining, and impeccable tax governance. The cost of compliance will rise temporarily so that, in the future, it can fall structurally.

The tax reform is not just a test for the tax system — it is a maturity test for the productive and public sectors. The ticking clock of 2026 marks the beginning of the end of backwardness. The current mistakes are pedagogical; they show that modernization does not accept improvisation.

The remaining question is not whether the reform works, but who will have the stamina and organization to cross the bridge until 2033. The year 2026 is not just a test. It is a warning.