Brazil Tax Reform May Raise Effective Burden on Essential Services

Brazil's consumption tax reform, touted as revenue-neutral, may increase the effective tax burden on concession infrastructure and dependent services from 8-10% to the reference rate of 26.5-28%, impacting family income. The actual burden depends on sector-specific credit dynamics under the non-cumulative IBS and CBS taxes. This challenges the reform's neutrality claim and could affect consumer prices and political support.