Government confirms Selective Tax will be projected in the 2027 Budget and moves the Provisional Measure in Congress
The regulation of the Selective Tax (IS) gained a new chapter this week. On August 19, 2026, the Minister of Finance, Dario Durigan, confirmed that the government will send to Congress, at the end of the following week, the 2027 Annual Budget Bill (PLOA) with detailed projections for the Selective Tax for the first time, while also working to speed up the analysis of the provisional measure that will regulate the tax in the Legislature.
A day earlier, on August 18, Durigan himself had already indicated that the economic team is discussing the Selective Tax rate in order to finalize the PLOA, which is expected to be submitted at the end of next week. According to reports from the same period, the proposal may be sent along with the 2027 PLOA, expected to be forwarded to Congress on August 31, or in early September.
Why inclusion in the Budget matters
From a budgetary-technical standpoint, the move is relevant even without the IS rates being finalized: in the budget proposal, the economic team will not need to specify the rates of the Selective Tax or the CBS, but the bill will have to indicate revenue estimates for each tax, which will require the government to forecast scenarios with and without Selective Tax revenues right at the start of next year.
The issue is not trivial for public finances: sources consulted by the press admit that, if Congress does not approve the rate bill in time, the government could face a gap of around R$ 10 billion in the 2027 Budget, whose fiscal surplus target is 0.5% of GDP, equivalent to R$ 73.2 billion. For this reason, the economic team is already working on a contingency plan, still kept confidential, for the scenario in which approval is delayed.
The legislative calendar behind the rush
The movement around the Selective Tax is proceeding alongside a concentrated effort by the National Congress. According to the minister's own statements, the government's immediate priority is to set up the joint committee for another provisional measure currently being processed (the so-called 'blouse tax' MP), with the panel expected to meet as early as September 1 to elect a chair and rapporteur, paving the way for a vote during Congress's next concentrated legislative effort, scheduled to take place between August 31 and September 4. It is within this same tight legislative pace, shaped by the election calendar, that the Selective Tax MP is expected to move forward.
It's worth recalling the regulatory backdrop: for the Selective Tax to be in effect on January 1, 2027, the legislation setting the rates must observe the constitutional ninety-day principle (noventena), which pushes the legislative deadlines into the second half of the year. It is precisely this tight window that is putting pressure on the timeline announced now.
What the Selective Tax is expected to cover
According to the most recent information, the Selective Tax will apply to vehicles, vessels and aircraft, cigarettes, alcoholic beverages, sugary drinks, mineral goods, and lottery and sports betting activities. Notably, the economic team is considering differentiated treatment for cigarettes and sports betting, sectors seen as harmful to health or with greater revenue potential, which are expected to receive the highest possible rates within the tax's design.
Practical impact for tax, accounting, and IT teams
For tax and IT teams already dealing with the IBS/CBS timeline in electronic tax documents, the message is clear: even without finalized rates, the design of the Selective Tax is moving forward in parallel, and the tax could take effect as of January 1, 2027. This reinforces the need to keep NF-e, NFC-e, and NFS-e issuing systems ready to accommodate one more extrafiscal taxation field in the coming months, without waiting for the final rate definitions to begin parameterization testing.
It is recommended to closely monitor the publication of the MP (expected in September, according to the latest statements from the Ministry of Finance) and the text of the 2027 PLOA, which should bring the first official figures on the expected IS revenue collection, an important indicator of the tax's impact on the affected sectors.
This content is for informational purposes only and does not replace guidance from your accounting team, which should assess the specific impacts of the Selective Tax on your sector and tax regime as soon as the rates are published.
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