LatinNews Daily - 17 January 2025

*Brazil’s President Luiz Inácio Lula da Silva has promulgated into law a bill (PLP 68/2024) to add regulations to the country’s new system of consumption taxes. Approved by congress last month, the PLP sets rules on how to calculate the tax rates for different products and services in the new levies created by the landmark tax reform passed in December 2023. At the event yesterday in which Lula promulgated the bill, he said that the benefits of Brazil’s new, more streamlined tax system will truly begin to be felt from 2027 onwards. The new consumption taxes will be gradually phased in from 2026-2033. Lula vetoed a few clauses of the PLP, but the government has insisted these were just minor details. The provisions rejected by Lula include proposed tax exemptions for investment funds, as well as exemptions for some items from the Imposto Seletivo (IS), the so-called ‘sin tax’ to disincentivise the use of items considered to carry environmental or health risks. PLP 68/2024 is the first of two pieces of legislation proposing regulations for the tax reform. A second bill (PLP 108/2024) was approved by the lower house last year but not yet passed the senate.