Selective Tax and differentiated regimes in Tax Reform: risks, exceptions and how to prepare

The Selective Tax targets harmful products. Differentiated regimes benefit strategic sectors. Understand how these mechanisms work.

What is the Selective Tax?

Also called "sin tax", the Selective Tax (IS) is an additional federal tax on products and services harmful to health or the environment. It aims to discourage consumption and generate revenue for healthcare and environmental policies.

Products Subject to IS

• Alcoholic beverages
• Tobacco and cigarettes
• Sugary drinks
• Vehicles (depending on engine/emissions)
• Extraction of non-renewable resources (mining)
• Other products to be defined by complementary law

IS Characteristics

Differentiated Regimes (Reduced Rates)

To avoid excessive burden on essential sectors, the reform includes reduced CBS/IBS rates for:

Practical Impacts

For IS-Subject Companies

• Higher total tax burden: CBS + IBS + IS
• Product reformulation incentive: Lower sugar, smaller engines, greener alternatives
• Competitive repositioning: Companies that adapt faster gain market share

For Reduced-Rate Beneficiaries

• Significant competitive advantage: Lower costs than sectors at standard rate
• Product classification critical: Ensuring all eligible products/services are correctly classified
• Documentation: Proper records to justify reduced rate application

Conclusion

Selective Tax and differentiated regimes add complexity but also strategic opportunities. Companies that understand and adapt to these mechanisms early will have clear competitive advantages.