Brazil’s landmark reform to simplify its notoriously complex tax system is facing severe political pressure just as implementation begins, creating new legal uncertainty for companies operating in the country ahead of the October 2026 general election. The risk stems from twin political moves: a reported threat by the main opposition camp to suspend the new consumption tax if elected, and the incumbent government’s decision to delay the regulatory bill for the "sin tax," fearing an electoral backlash. The core of the reform, approved in 2023, is the creation of a dual Value Added Tax (VAT)—the federal Contribution on Goods and Services (CBS) and the state-level Tax on Goods and Services (IBS)—which will gradually replace five existing levies and is considered the country’s most significant structural economic gain in decades [cite:16, cite:10].