DUAL VAT AND EXCISE TAXATION: REFRAMING THE SOCIAL FISCAL CONTRACT AND THE QUEST FOR ECONOMIC SUSTAINABILITY IN BRAZIL

Abstract

The Brazilian tax reform, established by Constitutional Amendment No. 132/2023, represents a reframing of the social fiscal contract by replacing a historically complex model with the Dual VAT paradigm, comprised of the CBS (Contribution on Goods and Services) and the IBS (Tax on Goods and Services). The significance of this theme lies in the urgent need to eliminate tax cascading and the "Brazil Cost," thereby promoting tax neutrality, consumer transparency, and the country's integration into global value chains in accordance with OECD standards. Employing a qualitative and exploratory methodology grounded in the hypothetical-deductive method and a documentary review of supplementary laws enacted through 2025, this research analyzes the tension between simplification and excise taxation (extrafiscality). The findings indicate that the new framework, strengthened by technologies such as Split Payment, drastically reduces litigation and compliance costs. In the mining sector, the Selective Tax is identified as a catalyst for sustainability, provided its tax rate is calibrated to avoid undermining competitiveness. The system matures as an architect of permanent development and social justice.