Starting in 2027, the federal tax built into every liter of gasoline or diesel sold in Brazil will follow its own formula under the country's tax reform. For drivers at the pump and households buying cooking gas, the rule published on Monday, October 5, has a clear goal: keeping the new tax burden from exceeding what Brazilians pay today.
The ordinance from the Finance Ministry and the CGIBS, the committee that manages the new IBS tax, lays out how the rates of the CBS, which takes effect in 2027, and the IBS, scheduled for 2029, will be calculated for fuels. The story was reported by Folha de S.Paulo and confirmed by Gazeta do Povo and Estadão.
Understand the change. The CBS (Contribution on Goods and Services) and the IBS (Tax on Goods and Services) are the two taxes created by Brazil's tax reform to replace a tangle of current levies, such as PIS, Cofins, ICMS and ISS. For fuels, they will be charged per unit sold, in reais per liter, rather than as a percentage of the retail price.
How the tax will be calculated
The ordinance does not set how many cents per liter will be charged. It defines how the reference value used to set future rates will be calculated. That parameter exists to make sure fuel taxation does not rise above its current level during the transition to the new system.
To reach that reference, the rule splits the tax burden into two parts, direct and indirect. For the CBS, the direct part adds up what is collected today in PIS/Pasep and Cofins, including their import versions. The indirect part also counts IPI and IOF on insurance when those taxes fall on inputs, services and capital goods in the production chain and are not recovered as credits.
The IBS follows similar logic with different taxes: the direct burden considers the state-level ICMS, and the indirect one includes the municipal ISS as well. According to Folha, the rates will be the same across the whole country but specific to each type of fuel.
The methodology covers 11 products: gasoline, anhydrous ethanol, hydrous ethanol, diesel, biodiesel, liquefied petroleum gas (the LPG sold in household cylinders), aviation kerosene, fuel oil, processed natural gas, biomethane and vehicular natural gas. In practice, the rule reaches everything from the car's tank to the kitchen stove.