The publication of Provisional Measure No. 1,399 sets concrete rates for the Selective Tax starting in 2027, levied on products harmful to health and the environment.
The national tax landscape advanced in a decisive step with the detailing of key points of the Tax Reform. The publication of Provisional Measure No. 1,399 established the percentages for collecting the extrafiscal tax commonly known as the “Sin Tax.”
Although the tax was instituted by Constitutional Amendment No. 132/2023 and governed by Complementary Law No. 214/2025, the exact rates were confirmed only now. The financial effects take effect on February 2, 2027, meeting the nonagenary prior‑date requirement.
The measure is grounded in the Federal Constitution, allowing the Union to use taxation to discourage the sale of goods and services that harm public health and environmental preservation.
Taxation on beverages and tobacco products
The regulation introduces a progressive scale of rates based on product category. Sweetened beverages will be taxed at 2.6%, while malt beer will carry a fixed rate of 4.2%.
Other alcoholic beverages may reach rates up to 24%, varying by alcohol content and classification. Wines can be placed in brackets of 8%, 12%, or 16%. Small producers will receive graduated reductions for volumes up to 250,000 liters of alcohol.
The tobacco segment will face the highest fiscal incidence under the new rule. Cigarettes and cigarillos will pay a rate of 66.7%, plus a fixed amount of $3.50 per dozen. Other products in the sector will be subject to a 37.5% rate.
Environmental criteria in the automotive and transport sector
The motor vehicle segment will receive treatment based on socio‑environmental guidelines. Passenger cars will have a base rate of 6.3%, subject to adjustments for energy efficiency, power, and recyclability.
For commercial and cargo vehicles, the starting rate will be 3.9%. Electric or low‑emission models may receive incentives, while fossil‑fuel engines may incur additional charges.
Specific exemptions and reductions have been retained for taxi drivers, people with disabilities, and individuals on the autism spectrum. The text also sets a 6.8% rate for aircraft and a 12% rate for recreational motorboats.
Tax Integration and the IBS and CBS Base
Although the Selectivity Tax is levied only once along the supply chain, the amount collected will be incorporated into the calculation base for the IBS and CBS. This overlap could increase the final cost of the affected items.
The calculation of these amounts will be monitored by the Federal Revenue Service through electronic tax documents, requiring immediate adaptation of corporate systems and data governance within companies.
“In tax law, sin does not constitute a taxable event; there are legal hypotheses of incidence, calculation bases, rates, and constitutional limits on the power to tax.”
The structure outlined in MP No. 1,399 will serve as a transition model during 2027, a period in which extracted mineral goods will enjoy a temporary zero rate. By May 31, 2027, the Executive Branch will send the National Congress a new bill defining the rates to apply from 2028 onward.
The success of the new tax will depend on its real ability to alter consumption behaviors without becoming merely a mechanism for increasing revenue collection.