The Comitê Gestor do IBS, the body created by Brazil’s recent tax reform to oversee the nascent Goods and Services Tax (IBS), approved a 2027 budget of R$2.7 billion (about US$520 million) despite opposition from most state and municipal representatives on the committee. The spending cap follows a legal formula that sets the committee’s expenses at 50 percent of the projected IBS revenue for the year, with the tax set to be levied at a test rate of 0.1 percent on all sales of goods and services starting in 2027.
The decision highlighted a longstanding tug‑of‑war between two powerful municipal blocs inside the committee. The Frente Nacional de Prefeitas e Prefeitos (FNP), which holds 13 seats and represents most state capitals and larger cities, had proposed halving the budget to R$1.35 billion, arguing for austerity and real‑need alignment. Their amendment was defeated in a two‑stage vote: first approved by 17 of the 27 state representatives, then rejected by the 14 municipal seats controlled by the Confederação Nacional dos Municípios (CNM), which groups hundreds of smaller municipalities and holds a de‑facto veto under the committee’s voting rules.
Beyond the operating budget, the committee will also manage a federal loan of R$1.2 billion earmarked for a contingency reserve, as stipulated in the reform legislation. The loan is separate from the IBS revenue share that will be transferred to states and municipalities; a larger committee allocation directly reduces the amount available for those transfers.
On a related matter, the committee scrapped plans to pay jetons—attendance fees of R$11,500 for senior council members and R$805 for administrative judges per meeting—after the FNP and a majority of states argued the payments were unnecessary. The FNP subsequently released a statement calling the committee’s structure indispensable but urging a budget compatible with real needs, transparency and austerity. The CNM declined to comment.
The Comitê Gestor defended the approved budget as the result of prior technical studies indicating a conservative approach is warranted given uncertainties about future IBS collection. It added that dissent and debate are normal and that all amendment proposals were submitted to the constitutionally required quorum.
In its first full year of operation in 2027, the committee plans to spend 21 percent of its budget on personnel, 39 percent on investments and the remaining 40 percent on other current expenses. The body had no dedicated funding in 2025 and relied on seconded staff and resources from states and municipalities; for 2026 it forecast R$982 million in both revenues and expenditures, with over 40 percent earmarked for the contingency reserve and 15 percent for personnel costs. Looking ahead, the committee projects to administer an estimated R$1 trillion in IBS revenue from 2033 onward, equivalent to roughly 8 percent of Brazil’s GDP or one‑quarter of the nation’s total tax burden.