Selective Tax: Provisional Measure Pushed to Second Half of August, but the 90-Day Rule Is Already Running Against the Clock

What changed in the Selective Tax timeline

The federal government decided to postpone to the second half of August 2026 the submission to Congress of the provisional measure that will regulate operational aspects of the Selective Tax (IS), one of the three taxes created by the Tax Reform alongside IBS and CBS. The federal government is expected to postpone to the second half of August the submission of the provisional measure (MP) that will regulate aspects of the Selective Tax (IS), one of the new taxes created by the Tax Reform. The initial expectation was that the text would be sent to Congress still in July, but the economic team decided to postpone the proposal in order to complete technical studies and align the details of the regulation.

For those who handle tax, accounting, and IT matters, the most relevant point is not the delay itself, but the technical reason behind it: the so-called ninety-day rule. The central reason for sending a provisional measure is the ninety-day rule (the 90-day period required for a tax to take effect). For the IS to be in force by January 1, 2027, the law setting the rates needs to be in effect by October 3, 2026. In other words: even with the submission of the MP postponed, the regulatory clock is tight, and concrete movement from the National Congress is expected in the coming months.

What has already been confirmed

Despite the delay in submitting the proposal, the official position has not changed regarding the start date for the tax collection. Despite the delay, the Ministry of Finance told Congresso em Foco that the new tax will begin to apply on January 1, 2027. The purpose of the MP, according to the Ministry of Finance itself, is to regulate the operationalization of the tax. According to information from the Ministry of Finance, the provisional measure will serve to regulate operational aspects of the Selective Tax, whose creation was established by the Tax Reform's Constitutional Amendment.

As for setting the percentages that each sector will pay, there is still no set date. The definition of the rates should occur later, likely in 2027, when the government intends to present a specific proposal based on technical studies and the impacts observed during the implementation of the Tax Reform. The stated strategy is to avoid distortions: the government intends to wait for the initial phase of the Tax Reform to progress before setting the percentages that will apply to products subject to differentiated taxation, seeking to avoid distortions during the transition period of the new tax system.

Who is on the IS radar

The list of sectors and products potentially affected is already outlined in the legislation, even without defined rates. The approved legislation has already defined the economic groups that will be subject to the new tax. These include alcoholic beverages, cigarettes and other tobacco products, sugary beverages, vehicles, vessels and aircraft, as well as mineral extraction activities. A relevant operational detail for those who work with credit calculations: unlike CBS and IBS, the Selective Tax will not allow the use of tax credits. This means that, once the rates are set, the impact will tend to directly hit the margins of those operating in these segments.

The IS also has a direct relationship with the current IPI: the tax will replace most of the functions currently performed by the Tax on Industrialized Products (IPI), which, starting in 2027, will be maintained mainly to preserve the advantages of the Manaus Free Trade Zone. Behind the scenes, sector-by-sector negotiations are already moving forward unevenly: the industry, vehicle manufacturers, breweries, and cigarette producers seem to have come to terms with the idea, but there is still a need to engage with some representatives of soft drink manufacturers and distilled beverage producers, who have already shown resistance to the proposal.

The cap that no longer exists

A point that deserves attention from those following the final design of the rates: in December 2025, the Chamber of Deputies removed a limit that was under discussion. In December 2025, the Chamber confirmed the removal of a 2% cap on the Selective Tax for these products, in a close vote: 242 deputies rejected reinstating the limit while 221 voted in favor. Without the cap, the rate could exceed 2%, depending on the proposal the government sends to Congress. There is currently a parallel proposal moving through Congress with a different logic: Complementary Bill 42/2026, introduced by lawmakers from the Novo party, proposes limiting the Selective Tax rates to between 0% and 5%. Neither matter has been decided — but both show that the range of variation for future rates is still wide.

Why this matters for tax, accounting, and IT teams now, even without a defined rate

Even without finalized percentages, it's already worth getting organized:

Review the NCM/NBS mapping of the products and services in your portfolio that appear on the list of possible IS incidences (alcoholic and sugary beverages, cigarettes, vehicles, vessels, aircraft, mineral extraction inputs). This avoids rework once the MP and the rates are published.

Keep your ERP's tax engine flexible to accommodate a new tax group, since the IS will have its own calculation logic, with no credit offsetting, unlike what happens with IBS and CBS.

Follow the publication of the MP in the second half of August and, subsequently, the Joint Acts from RFB/CGIBS and the technical notes for NF-e, NFC-e, and NFS-e that usually follow every legal update — the recent experience with the August 3 calendar showed that layout adjustments tend to come shortly after the regulation.

Avoid repricing products or renegotiating long-term contracts based on rate estimates that are not yet official. The government itself treats the percentages as an open matter until 2027.

This content is for informational purposes only and does not replace guidance from your accounting team, which should assess the specific impact of the Selective Tax on your company's operations. To keep your ERP and tax document issuance ready for this and other updates from the Tax Reform, talk to Edoo.