巴西税改重塑州市收入分配，小城市受益或影响中资选址策略

Alberto Borges Rogerio Vieira/Valor Brazil’s tax reform is expected to reshape how consumption-tax revenue is divided among states and municipalities, increasing the relative share of local governments while reducing that of state administrations in the retained portion of the future Goods and Services Tax, known as the IBS. Preliminary figures show that the states’ share of the revenue base used in the calculation fell to 64.4% between 2019 and 2025, from 67% in 2017 and 2018. The municipalities’ portion rose to 35.6% from 33% over the same period. The shift is likely to favor smaller cities while reducing the relative weight of major urban centers during the transition to the new tax system. The calculation matters because the retained portion will account for most IBS revenue for more than two decades, although the effect on individual government finances will be spread over time. The retained share will stand at 90% in 2033 and, because it will decline only gradually, will continue to represent more than half of IBS revenue through 2052. Tax reform delays could stall business in 2027 Brazil plans soft rollout of tax reform’s new selective levy The states’ aggregate share could fall further, to 63.8% in 2026, preliminary estimates suggest, while the municipalities’ portion could reach 36.2%. The changing balance reflects not only the reform’s new rules but also a series of shocks that affected revenue from the state ICMS (a levy on the circulation of goods and certain transportation and communication services) and the ISS municipal services tax in recent years. Within the municipal group, less populous cities are generally expected to increase their relative share of retained IBS revenue, while some large urban centers lose ground. The calculations and projections are part of a study by Aequus Consultoria Econômica e Sistemas. Alberto Borges, an economist and partner at Aequus, said many states and municipalities are trying to estimate the coefficients that will determine their share of retained IBS revenue, as this component will dominate collections under the new tax for several government terms. New tax structure The consumption-tax reform will replace the ICMS, the main tax collected by states, and the ISS, the leading source of municipalities’ own tax revenue, with the IBS. For consumers and companies, the transition from the two existing taxes will take place between 2029 and 2032, as the ICMS and ISS are gradually phased out. The IBS will be fully levied from 2033. Before then, a symbolic IBS rate of 0.1% will apply from 2026 through 2028 as part of a test phase. The results will help calibrate the new tax’s benchmark rates, which will be set by the Senate. Federal consumption taxes—including PIS, Cofins and the IPI industrialized-products tax—will also be replaced by the federal Contribution on Goods and Services, or CBS, under a separate implementation schedule. Because the Aequus study focuses on state and municipal revenue, it examines the effects of the transition from the ICMS and ISS to the IBS. Fifty-year transition States and municipalities will collect the IBS, but the system for distributing its proceeds will move much more slowly toward the reform’s new model. The transition will continue even after the tax is fully operational. The revenue-sharing phase will last 50 years, from 2029 to 2078, to soften the impact of one of the reform’s most significant changes: the shift from taxation at the place of origin to taxation at the destination of consumption. Between 2029 and 2032, while the ICMS and ISS are being replaced, 80% of IBS revenue will be retained and divided among states and municipalities under historical-revenue criteria. In 2033, when the IBS is fully implemented, the retained share will rise to 90%. Starting in 2034, it will fall gradually at a rate of one forty-fifth (1/45) a year—equivalent to two percentage points annually—until it is eliminated in 2078. At that point, revenue will be distributed entirely on the basis of destination. The portion not retained will follow the destination principle. It will account for 20% of revenue from 2029 through 2032, fall to 10% in 2033 and then rise gradually to 100% by 2078. Historical base The retained IBS portion will be distributed using each state’s and municipality’s average share of ICMS and ISS revenue between 2019 and 2026. Aequus calculated preliminary coefficients using state ICMS revenue net of transfers, municipal ISS collections and the portion of ICMS revenue transferred by each state to its municipalities between 2019 and 2025. Borges said this period already covers seven of the eight years that will ultimately form the calculation base. It therefore represents 87.5% of the historical series used to determine each government’s final share of the retained revenue pool. Municipal data were drawn from annual financial statements, while state figures came from summarized budget-execution reports. Revenue collected by state funds was not included. To estimate how the reform could alter the relative position of states and municipalities, Aequus compared the preliminary coefficients for 2019 through 2025 with each government’s share in 2017 and 2018. The earlier period predates both the COVID-19 pandemic and recent changes to ICMS legislation. Borges said the comparison was designed to assess whether states and municipalities would emerge in a more or less favorable position once the IBS model is consolidated. Final coefficients will still depend on 2026 results, he said. A number of governments are adopting “explicit measures” to raise revenue and at least preserve their share of the retained IBS pool. These include reviewing tax incentives, raising rates and introducing programs such as Refis to recover overdue tax debts. Municipal gains The comparison indicates that states collectively lost 2.6 percentage points of the total revenue base that will be used to divide the retained IBS portion when the 2019-2025 period is measured against 2017 and 2018. That share shifted from state governments to municipalities, Borges said. “In fact, the ICMS was already losing strength before the reform.” Nominal ISS revenue rose 142.1% between 2018 and 2025, the study found, while ICMS collections increased 83.2%. The post-pandemic economic recovery, led by stronger growth in the services sector, boosted ISS receipts, Borges said. State ICMS revenue, meanwhile, was heavily affected in 2022 by limits on tax rates introduced by Complementary Laws 192 and 194. Uneven effects The simulations show that 40.6% of states and municipalities saw changes of no more than 10%, either positive or negative, in their participation coefficients between the two periods analyzed. “The result suggests that, for a significant proportion of federal entities, the transition to the new distribution model should not produce major changes in their relative share of the tax amounts retained,” the study said. Another 52.8% are expected to have coefficients well above their 2017-2018 levels. Within that group, 32.2% are projected to post increases of between 10% and 30%, while 10.9% could post gains of between 30% and 50%. A further 9.7% are expected to exceed 50%. At the other end of the spectrum, 6.6% of states and municipalities are likely to experience declines of more than 10% in their coefficients. For 5.8% of the total, the decreases are projected to range from 10% to 30%. Borges emphasized that a negative change in a participation coefficient does not necessarily mean a government will lose revenue. It indicates only whether that government will occupy a better or worse position relative to other states and municipalities under the structure created by the IBS. Revenue insurance The tax reform establishes a revenue-insurance mechanism to cushion losses caused by the move from origin-based to destination-based taxation. Under the mechanism, 5% of the IBS revenue distributed through the destination principle—and therefore not included in the retained portion—will compensate states and municipalities facing the largest revenue losses during the transition. The revenue insurance will remain in place from 2029 through 2077. Between 2078 and 2096, it will be reduced by one twentieth (1/20) a year. Its purpose is to preserve at least the real, inflation-adjusted revenue of each state and municipality. During the legislative debate that led to Constitutional Amendment 132 of 2023, the government argued that states and municipalities could ultimately gain revenue because a more efficient tax system should support economic expansion and enlarge the total revenue pool over time. Smaller cities The study also identifies an uneven redistribution among municipalities of different population sizes. Less populous cities posted the largest increases in their relative share of the revenue that will form the retained IBS base. Municipalities with up to 20,000 inhabitants increased their portion of the municipal revenue base to 4.9% in 2019-2025, from 4.3% in 2017 and 2018. Cities with between 20,000 and 50,000 residents saw their share rise to 4.1% from 3.6%. The increases in the two population groups amounted to 12.7% and 12.1%, respectively. By comparison, cities with more than 500,000 inhabitants increased their share to 13.6% from 13.1%, a gain of only 3.8%. Borges said the disparity reflects the rapid growth in ISS collections, the varying effects of the pandemic on local economies and changes to the distribution of ICMS revenue following Constitutional Amendment 108 of 2020. The amendment introduced an additional education-based criterion for determining municipalities’ shares of state ICMS transfers. “Taken together, these factors helped increase the relative participation of smaller municipalities and reduce the weight of some major urban centers and states in the revenue base that will be used to calculate the retained IBS portion,” the study said.