# Brazil Government Rejects Tax Reform Delay Administration plans six-month compliance grace period to assist businesses with new tax rules. - **Source:** [G1 – Política](https://g1.globo.com/politica) - **Published:** 2026-11-11 - **Topic:** [politics](https://brifing.si/c/politics) - **Original article:** - **On Brifing:** https://brifing.si/s/b84fd2c2-46fc-45c6-a5a6-057dc01fb148 ## Reform Schedule Remains Firm The Brazilian government officially rejected calls to postpone the upcoming tax reform. Officials emphasize that delaying the implementation would generate significant legal uncertainty for the national economy. The administration remains focused on securing congressional approval for necessary measures to ensure the new system becomes fully operational starting this January. ## Grace Period for Compliance To support businesses during the transition, the government will introduce a six-month adaptation period. Companies acting in good faith that struggle with the new regulations will be exempt from fines and penalties. This measure specifically targets errors of interpretation or unintentional mistakes rather than deliberate attempts to evade tax obligations. ## Split Payment System Maintained The government confirmed it will not abandon the 'Split Payment' model despite some opposition. This automated system distributes tax revenue immediately among federal, state, and municipal authorities. To mitigate cash flow issues for companies, officials are designing an adjustment mechanism allowing businesses to offset tax payments during the transition phase. ## Addressing Political Opposition Political debate persists, with figures like Flávio Bolsonaro advocating for the total extinction of the model before its launch. The Lula administration firmly disagrees, arguing that the new system is essential for reducing tax evasion. The government continues to prioritize legislative progress to prevent any disruption to the planned implementation timeline. ## Legislative Hurdles and PEC Congress must still analyze a Proposed Constitutional Amendment regarding the selective tax rules. During the first year of implementation, previous tax rates will be maintained to ensure stability. This legislative step is crucial for finalizing the regulatory framework that will govern the transition for various productive sectors across the country. ## Clarifying Tax Rate Caps Finance Ministry officials clarified that the federal CBS tax rate cap is projected at 11.3%, though the average will likely remain around 8.5%. While the 11.3% figure was suggested by the TCU, it requires formal congressional approval. Adjustments will be made to ensure the total tax burden does not exceed 26.5%. ## Focus on Small Businesses Micro and small enterprises face the most significant challenges in adapting to these complex tax changes. The government's compliance plan is designed to provide these smaller entities with the necessary breathing room to align their accounting practices. Officials are working closely with private sector representatives to facilitate this difficult initial phase. ## Economic Impact and Outlook The government's commitment to the January deadline reflects a desire to modernize the tax structure despite industry concerns. By balancing strict implementation with a temporary waiver on penalties, the administration hopes to minimize economic friction. Future success depends on the effective coordination between legislative bodies and the diverse needs of taxpayers. ## Sources covering this story - https://g1.globo.com/economia/blog/ana-flor/post/2026/11/11/governo-descarta-adiamento-da-reforma-tributaria.ghtml — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._