In corporate debates, consumption tax reform has been interpreted as an exercise in adapting to the Goods and Services Tax (IBS) and the Goods and Services Contribution (CBS), focusing on full non-cumulativeness, split payment , a transition regime, and other factors. In this narrative, the Selective Tax (IS) is often relegated to a footnote, nicknamed the “sin tax” by journalists, and relegated to a supposedly comfortable future agenda to be addressed only in 2027. This perspective is entirely misguided.

The IS (Stamp Duty) is the tax with the least public visibility and, at the same time, the one with the greatest disruptive potential on the margins of consumer retail. Understanding it requires going beyond the regulatory surface and addressing three characteristics that, combined, reshape the internal economy of supermarkets, wholesale stores, convenience stores, and beverage retail operators.

The first is the single-phase system. The IS (Stamp Duty) is levied only once, on production or importation, so the retail reseller is not a liable party, that is, they do not fill out forms, do not collect, and do not formally operate the tax. This absence of obligations paradoxically produces the feeling that the IS is irrelevant to them. This is a misconception. Despite not collecting the IS, the retailer bears its burden in a way that is dissolved in the acquisition price charged by the industry, resulting in effects on profitability, product mix, and capital employed in inventory.

The second is the lack of creditability. While the IBS and CBS operate under full non-cumulativeness, allowing the tax paid on the purchase to be offset by the tax due on the sale, the IS does not generate credit, is not neutralized along the chain, and behaves as a definitive cost. Retailers are accustomed to treating consumption taxes as current accounts to be offset; the IS breaks this logic and requires distinct accounting and management treatment, as a real and permanent increase in the cost of the goods purchased.

The third is integration into the calculation base of the IBS and CBS.

In economic terms, there is a cumulative effect between different taxes; a tax (IBS/CBS) is levied on top of another tax (IS). Systemically, this is a clear tension with the principle of non-cumulativeness, which constitutes the stated axis of the reform. Historically, the Tax on Industrialized Products (IPI) was not included in the ICMS tax base precisely to avoid this overlap. However, the IS – considered the successor to the IPI – reverses the logic and produces a stacking effect, since the final price does not rise only by the exact value of the tax, but by the chain effect it causes, as it is included in the tax base of both the IBS and the CBS.

The practical relevance of the IS (Important Substitution) characteristics lies in knowing which products are considered a “sin.” Taking sugary drinks as an example, they are at the center of concern due to the breadth of their scope, which tends to include soft drinks, processed juices, energy drinks, sports drinks, ready-to-drink teas, and sweetened dairy beverages. In the case of alcoholic beverages, beers, wines, spirits, and sparkling wines will receive treatment with a strong selective component, where the tax rate tends to increase according to the alcohol content.

It is important to highlight that, based on the legislation, the definition of what is effectively covered by the IS (Stamp Duty) depends on the tax classification by NCM (Mercosur Common Nomenclature), and Annex XVII of LC No. 214/2025 presents significant inconsistencies. For example, there are products with added sugar that are not included in the list, even though, according to the material criterion of harmfulness, they should be, and there are products without added sugar that are included. The discrepancy between the substantive and formal criteria creates a flank of legal uncertainty.

Regarding the implementation schedule for this tax, the IS (Stamp Duty) collection begins on January 1, 2027, and this delay produces a perverse psychological effect, which is the false impression of time. The strategic decisions that will protect the margin in 2027 need to be made, based on simulations and analyses, through contractual adjustments and tax planning, in 2026, still within the test year of the IBS (Integrated Sales Tax) and CBS (Contribution on Goods and Services).

Retailers who wait until the end of the fiscal year to react will discover, in February 2027, that their margins have shrunk without any conscious decision having been made regarding cost-cutting, absorption, or repositioning.

Therefore, the IS (Stamp Duty) is not a problem for 2027, but rather a planning problem for 2026. It acts as a definitive cost, increases the base for other consumption taxes, affects high-turnover categories in retail, and imposes conscious decisions regarding pricing, contracts, systems, and portfolio composition. Companies that treat the issue as a detail of the reform and not as a margin restructuring will discover the impact too late.

• Antônio Affonso Filho is a tax lawyer in Rio de Janeiro, specializing in Financial and Tax Law from UERJ, with a Master of Laws (LL.M) in Tax Law and Tax Accounting from IBMEC-RJ and a Bachelor of Laws degree from Cândido Mendes University.