Selective Tax: Rates Provisional Measure Must Reach Congress by November 3, and Collection Shifts to February 2027

What changed in the last few days

The Selective Tax (IS) calendar, the so-called "sin tax," had a relevant update this week. The original deadline for the publication of the Provisional Measure with the tax rates expired on October 2, 2026, without the government issuing the rule. Now, in recent statements, the Ministry of Finance confirmed that it intends to unblock the matter: the federal government is expected to send to the National Congress, still this week, the regulation proposal for the Selective Tax (IS), known as the sin tax, which will maintain the current IPI burden on the affected products during the implementation phase of the tax reform. The Minister of Finance, Dario Durigan, publicly stated that the government should still publish this week the provisional measure (MP) that establishes the Selective Tax rates.

Why the publication date is decisive: the ninety-day rule

The technical point that every tax department needs to monitor is the ninety-day anteriority (noventena). The legislation requires a minimum interval of 90 days between the publication of the rule and the start of collection. Since the October deadline was not met, the government's expectation is that the so-called sin tax will start being collected in February 2027, instead of January 1, as originally designed in the reform. Market analyses had already treated this scenario as the most likely since the end of September: should the publication of the provisional measure occur only in early November 2026, the collection of the Selective Tax will only begin as of Monday, February 1, 2027.

It is worth noting that, until the actual publication of the MP, the scenario could change again: there are earlier reports that the text was still being discussed internally and that an additional delay could push the start of collection to March. Therefore, daily monitoring of the Official Gazette remains the only safe way to confirm the actual date.

Who is on the Selective Tax's radar

The IS has a regulatory design, not a purely revenue-raising one, and applies to a specific list of goods and services. The tax will apply to cigarettes, alcoholic beverages, soft drinks, polluting vehicles, mineral extraction, as well as lotteries and betting. One point already set in Complementary Law 214/2025, regardless of the MP, is the cap for the extractive sector: the Selective Tax on iron ore and on the export and production of oil will be capped at 0.25%.

For those operating outside these segments, the direct impact is low, but the indirect effect on the price chain may exist, especially because the IS enters the calculation base of other taxes. Companies that purchase inputs subject to the Selective Tax (for example, industries that use beverages, fuels, or vehicles as inputs or fleet) should watch for cost pass-through once the rate is published.

Impact on tax parameterization and on the ERP

Even without a defined rate, there are tasks that the tax and IT team can get ahead of now:

• Review the company's product tax classification (NCM) to precisely identify which items are on the IS incidence list;
• Confirm that the NF-e and NFC-e issuance system already supports the IBS, CBS, and IS fields provided for since NT 2025.002-RTC, even if zeroed out or still in testing;
• Keep the ERP's rate table ready to receive the percentage as soon as the MP is published, since the gap between the rule's enactment and its entry into force tends to be short;
• Map the effect of the IS on pricing, considering that it is part of the IBS and CBS calculation base, generating tax on tax;
• Monitor the MP's progress in Congress, since its conversion into definitive law (or eventual expiration) could change the calendar again.

Summarized timeline

• October 2, 2026: original deadline for the MP, not met by the government;
• Week of October 28, 2026: Ministry of Finance confirms it will send the proposal to Congress;
• By November 3, 2026: expected formal submission of the MP;
• 90 days after publication: start of the ninety-day count;
• February 1, 2027: most likely date for the start of collection, if the MP is published in early November.

This content is for informational purposes only and does not replace guidance from your accounting firm or tax advisory, especially given a calendar that may still change until the official publication of the rule.

Want to keep your ERP's tax configuration ready for the Selective Tax's arrival as soon as the rate is released? Talk to Edoo.