Study on the goods and services tax (GTS) and its impacts on the brazilian tax system

Abstract

According to the Organization for Economic Co-operation and Development (OECD), Brazil has one of the highest tax burdens in the world. However, the country faces persistent challenges in managing the collected revenue and in ensuring its effective return to society through public policies, infrastructure, and high-quality essential services. This scenario reveals shortcomings related to the complexity and instability of tax regulations, the excessive number of ancillary obligations, and the overall legal uncertainty in the country. The combination of these factors undermines the national business environment and increases corporate compliance costs. In this context, the present study aims to analyze the main characteristics of the GTS (Goods and Services Tax) and to assess the potential impacts of the tax transition in Brazil. A qualitative approach was adopted, based on a specialized literature review. From this analysis, several relevant innovations were identified, such as the automated tax collection system (split payment), the partial tax refund for low-income families (cashback), and the shift in the tax incidence criterion to the destination principle. In addition, a long transition period was established to facilitate the adaptation of taxpayers and governmental entities to the new tax structure. Therefore, it can be observed that the reform proposes a simpler and more efficient fiscal system, whose success will depend on the cooperation among all stakeholders, to ensure a safe transition compatible with the national socioeconomic reality.