The Tribunal de Contas da União (TCU, Brazil's federal audit court) approved on Wednesday a reference rate of 11.3% for the Contribuição sobre Bens e Serviços (CBS, Contribution on Goods and Services), the federal tax that starts being charged in 2027 and gradually replaces two existing levies on turnover, PIS/Pasep and Cofins. It is the first official figure for the new consumption tax designed by Brazil's tax reform.
The calculation submitted by the Receita Federal (the federal tax authority) came to 11.3468%, which the court rounded to 11.3%. In the same decision, the TCU approved a 44.2% reduction applied to purchases by central government bodies, public agencies and public foundations, including imports.
What the court assessed
The case rapporteur, minister Vital do Rêgo, said the court had aimed at neither the ceiling nor the floor. "We did not seek the highest possible revenue, nor the lowest imaginable rate," he said, according to CNN Brasil.
The Receita Federal sent the court its methodology for calculating both the rate and the reduction, split into 17 modules, which the TCU reviewed and approved. On the court's reading, the percentage neither raises nor lowers the burden taxpayers already carry through PIS/Pasep and Cofins: the calculation started from what those two taxes currently collect.
What still has to happen
The decision goes to the Senado (Senate), which has until 15 December to confirm the percentage by resolution. If it does not set the rate within that deadline, the TCU's proposal automatically takes effect on 1 January 2027, according to Agência Senado.
The sums involved are large even in the debut year, when the CBS is charged on a trial basis. The 2027 budget bill estimates R$ 636.8 billion in revenue from the contribution. A new selective tax on goods harmful to health and the environment, also starting next year, appears in the government's accounts at R$ 41.9 billion.
Why this first figure matters
The CBS is the federal half of the new model. The other half is the Imposto sobre Bens e Serviços (IBS, Tax on Goods and Services), levied by states and municipalities, whose rate is set through a separate process. Added together, the two form the headline consumption rate — the one taxpayers will feel once the transition ends in 2033, when the old system disappears.
That is why Wednesday's percentage works as the first public benchmark for a calculation that had so far rested on estimates: it does not settle the argument over the combined rate, but it anchors the federal part of it.
With information from Agência Senado and CNN Brasil.
