Tax Burden in Brazil 2025: International Comparison and expectations
Por Guilherme PagottoBrazilians work 149 days a year just to pay taxes. That's almost 5 months of work dedicated exclusively to funding the State.
If you feel your company pays too much and receives too little in return, the data confirms it: you are right. Brazil lives a fiscal paradox where the tax burden is worthy of a developed country, but the return to society is one of the worst in the world.
In this definitive article, we analyze the real numbers of 2024-2025, compare Brazil with the largest global economies, and explain how the Tax Reform (LC 214/2025) will drastically alter this scenario — for better or worse.
1. The Current Situation: Numbers Every Entrepreneur Needs to Know
To take strategic decisions, one must go beyond "guesswork" and look at cold hard data. The Brazilian tax burden is not only high; it is complex and poorly distributed.
Tax Burden in 2024: The Real Weight
According to consolidated data from the National Treasury and the Federal Revenue, the Brazilian tax burden reached 32.32% of GDP in 2024. Some methodologies, such as FGV's (which includes system S and other contributions), place this number even higher, reaching 34.24%.
But the data that impacts daily life the most is the working time required to settle these obligations. The annual study by IBPT (Brazilian Institute of Planning and Taxation) reveals that, in 2024, Brazilians worked until May 28th just to pay taxes.
How is the Burden Composed?
The Brazilian system punishes consumption and production, which directly affects business competitiveness. See the distribution of the 149 days of work:
Consumption (56%) - PIS, COFINS, ICMS...
Income (37%) - IRPJ, CSLL, IRPF
Wealth (7%) - IPTU, IPVA
This concentration on consumption makes products and services more expensive, generating the so-called "Brazil Cost".
2. Brazil in the World Ranking: How Do We Compare?
We frequently hear that "Brazil has the highest tax burden in the world". This is not technically true, but the reality is more subtle — and perhaps more worrying.
If we compare only the percentage of GDP, Brazil would be in the 14th position among OECD countries (Organisation for Economic Co-operation and Development), if it were a member.
See the comparison with data from OECD Revenue Statistics 2025:
The Brazilian Paradox
Brazilian companies spend about **2,000 hours per year** to calculate and pay taxes (World Bank). The OECD average is less than 200 hours.
In Latin America, the average tax burden is **21.3%**. Brazil, with its 33-34%, is an outlier, charging **50% more than its neighbors**, which reduces our regional competitiveness.
3. The IRBES Index: Why is the Return So Low?
Here we get to the heart of the frustration of the entrepreneur and the Brazilian citizen. We pay "first world" taxes, but receive services of...
The IRBES (Index of Return of Well-being to Society), calculated by IBPT, crosses the tax burden with the HDI (Human Development Index). The goal is to measure State efficiency: how much well-being is generated for each unit of tax collected.
While Switzerland charges 28.5% of GDP and delivers one of the best qualities of life on the planet (2nd place in return), Brazil charges 34% and delivers precarious public services.
"Brazil is a global "case" of tax inefficiency. We collect a lot, spend badly, and return little."
4. Tax Reform (LC 214/2025): What Changes in the Burden?
The Tax Reform, regulated by Complementary Law 214/2025, promises to simplify the system. But will it reduce the burden?
The End of the "Alphabet Soup"
Federal: PIS, COFINS, IPI | State/Municipal: ICMS, ISS
CBS (Federal): ~8.8% | IBS (State/Municipal): ~17.7% | IS (Selective Tax): "Sin Tax"
The New World Record
The sum of the rates (CBS + IBS) should be around 26.5% to 28.55%.
Who Wins and Who Loses?
The reform changes the taxation logic from origin to destination and ends cumulativity.
- Industry: Tends to gain, as it will be able to take advantage of tax credits more broadly.
- Services: Tends to feel a burden increase, as it has few credits to deduct.
- Agro: Maintains favored regimes, but with new compliance rules.
The International Monetary Fund (IMF), in its 2024 analysis, was optimistic: stated that the reform "should increase productivity, boost formal employment, and improve tax equity". But for your company, the impact depends on your regime and sector.
5. Strategies for Companies: How to Navigate This Scenario
Facing a 34% tax burden and the biggest fiscal change in the last 50 years, passivity is an incalculable risk.
1. Tax Planning is "Core Business"
Don't treat taxes as just bureaucracy. A **deep tax study** can reveal opportunities for credit recovery and regime revision.
2. Consider Real Profit
With the economy cooling down, paying tax on effective profit can generate savings of **30% to 40%** in federal taxes. **[Find out if it's worth migrating to Real Profit](/en/solutions/accounting/real-profit)**.
3. Prepare for Transition (2026-2033)
Your ERP systems, pricing, and contracts need to be reviewed **now** to deal with the dual system. **[Meet our Tax Consultancy service](/en/solutions/tax360)**.
4. Asset Protection
With the state's voracity to collect, protecting the partners' assets becomes imperative through **Holding** structures. **[Understand why to structure a Holding still in 2025](/en/solutions/holding360)**.
Conclusion: Transform Cost into Strategy
The Brazilian tax scenario of 2025 is challenging. We have a high burden, low social return, and ongoing structural reform.
You cannot control the rate the government sets. But you can control your company's tax efficiency.
Sources and References
- OECD — Revenue Statistics 2025
- OECD/ECLAC — Revenue Stats LAC
- IMF — Brazil: 2024 Article IV
- IBPT — IRBES 2024
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Guilherme Pagotto
Diretor Tributário
Accountant and Lawyer, specialist in Strategic Tax Planning at OSP. Over 30 years of experience in tax optimization and asset protection.
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