By Akracia – Fenikso Nigra
Since January 1, 2026, Brazilian companies began highlighting two new taxes on invoices: the Contribution on Goods and Services and the Tax on Goods and Services. Presented as the biggest tax simplification in recent decades, the reform promises to end the complexity of the Brazilian system. However, when observing who wins and who loses with these changes, it becomes clear that simplification and justice do not necessarily go hand in hand.
The official narrative emphasizes the reduction from five taxes to two main ones, the end of the tax war between states, and transparency for the final consumer. These objectives, presented as universal benefits, mask concrete distributive choices. The reform was designed to be neutral in total collection but redistributive among sectors. This means some will pay less while others will assume a greater burden.
The service sector clearly illustrates this redistribution. Currently, small service providers pay municipal Service Tax ranging from two to five percent, depending on the activity and city. With the complete reform, the standard rate will reach between 26.5% and 28%, one of the highest in the world. Even with the tax credit system, many small businesses will face significant increases in burden. Consulting firms, accounting offices, beauty salons, gyms, and self-employed professionals will see their tax costs multiplied.
The technical justification points out that industry will benefit from eliminating cascading taxes and the possibility of recovering credits throughout the production chain. Indeed, large industries and exporters will gain from the new model. The problem is not in reducing the burden on industrial production, but in transferring that weight to sectors that concentrate a greater number of small enterprises and self-employed workers.
Complexity also remains, just changing form. Companies will need to coexist with two tax systems simultaneously until 2033. During 2026, they issue invoices highlighting the new taxes without actually collecting them, while continuing to pay the old taxes. From 2027 onward, federal Contribution collections begin, but state and municipal taxes will only be gradually replaced until 2033. Managing this transition requires sophisticated computer systems, specialized consulting, and trained teams. Small businesses face disproportionate adaptation costs.
Another frequently silenced point is the tax base during the transition. States like São Paulo and the Federal District have already indicated they will include the new taxes in the state tax calculation base starting in 2027. This means paying tax on tax, further raising the effective burden. The so-called “trial of the century,” which excluded certain taxes from the calculation base of others, will be tested again in courts, generating years of legal uncertainty.
The reform also leaves the regressive structure of Brazilian taxation untouched. The country proportionally charges more from those who consume than from those who accumulate wealth or income. The new standard rate of nearly 28% will apply to all purchases, affecting low-income families more harshly as they allocate a larger portion of their income to consumption. Tax cashback for families registered in social programs partially mitigates this effect but does not alter the fundamental logic.
Historical experiences in various parts of the world show that tax systems can be organized according to different principles. During the Spanish Revolution, Catalan communities organized contribution systems based on local assemblies that defined priorities for collection and allocation. In Mexico, Zapatista indigenous communities developed forms of collective contribution where decisions about amounts and resource allocation are made in community assemblies.
In Brazil itself, participatory budgeting experiences in cities like Porto Alegre in the 1990s and 2000s demonstrated possibilities for involving the population in decisions about public collection and spending. Although limited by the institutional framework, these practices showed that real tax transparency requires decision-making participation, not just information about rates.
Quilombola and indigenous communities in Brazil maintain forms of collective contribution based on reciprocity and need, not on fixed percentages applied to monetary transactions. Systems of collective work efforts, communal work in shared areas, and in-kind contributions for festivities and shared needs function as forms of self-managed taxation, decided by those who actually contribute and benefit.
Various anarchist strands question not only rates or tax progressivity, but the very concentration of tax decisions in hierarchical instances distant from affected people. The central question is not how much is paid, but who decides how much, on what, and for what purposes. Centralized tax systems, even when technically efficient, remove from the population the power to define priorities about collective resources.
Recognizing that tax reform is not simply technical opens space for practical questions. Why does the standard rate need to be among the highest in the world? Why not tax large fortunes, substantial inheritances, and speculative financial transactions more heavily? Why couldn’t the transition begin with sectors of greater contributive capacity, sparing small businesses until the system is stabilized?
These questions have no neutral technical answers. The choices made in the reform reflect political power correlations and priorities defined by those with greater capacity to pressure the legislative process. Large companies actively participated in discussions; small service providers discovered the impacts afterward. This is not a technical failure but the normal functioning of concentrated decision-making processes.
Practical action involves building local alternatives that reduce dependence on conventional tax and monetary circuits. Consumer cooperatives, direct exchange systems, community banks, and local currencies can create spaces of economic organization where decisions about contribution and resource allocation are made by those who actually participate. These alternatives do not immediately eliminate state taxation but create experiences of economic self-management that strengthen organizational capacities.
Brazilian tax reform will continue its course until 2033. During this transition, it will be essential to continually expose the interests behind each choice presented as technical necessity, support harmed sectors in organizing resistance, and build, where possible, forms of solidarity economy that demonstrate that other systems of collective contribution are viable.
In struggle, we are dignified and free people!
