The debate on the impact of tax burden on Brazilian industry returns to the spotlight in 2025. Amid discussions about tax increases such as the IOF (Tax on Financial Operations) and taxation of previously exempt investmentsas the LCI (Mortgage Letter of Credit) e LCA (Agribusiness Letter of Credit), businesspeople and experts warn of the risk of a new wave of credit enhancement e slowdown in industrial activity.

This scenario reinforces the need to understand how the high tax burden affects not only industrial production, but also the consumption, employment and international competitiveness of Brazil.

Current context: more taxes and more expensive credit

The federal government's recent proposals focus on increase the collection through new sources of revenue. Among the main measures discussed are:

• Adjustment in IOF rates, making essential credit lines for working capital and productive investment more expensive.
• End of tax exemption on LCI and LCA, instruments that were previously used by companies and investors as a way of raising funds at a lower cost.

The increase in taxation on these financial transactions directly affects the industry investment capacity, making it difficult to renew equipment, expand production and even hire labor.

Direct economic consequences for the industry

The increase in the tax burden on the productive sector tends to generate a series of negative impacts. Among the main expected effects are:

• Most expensive products: The increase in production and financing costs is passed on to the end consumer.
• Reduction in consumption: With higher prices, demand for industrial goods tends to fall.
• Fall in industrial GDP: The decline in industrial production compromises the overall performance of the economy.
• Lower job creation: The industrial sector, responsible for millions of jobs, tends to slow down new hiring.

According to CNI (National Confederation of Industry), the combination of high tax burden and restricted credit can intensify the cycle of stagnation, worsening unemployment rates and economic slowdown.

Climate of pessimism in the industrial sector

The sentiment in the sector is one of growing concern. In June 2025, the Industrial Entrepreneur Confidence Index (ICEI) registered his sixth consecutive fall, signaling:

• Low investment intention
• Forecast of production decline
• Worsening expectations regarding the economy in the coming months

The ICEI is an important thermometer for assessing the mood of businesspeople in the sector, and current numbers indicate that Brazilian industry is on alert.

The already high tax burden on Brazilian industry

Even before the new tax increase proposals, Brazil was already among the countries with higher tax burden on the productive sector, according to data from OECD (Organization for Economic Cooperation and Development).

Industrial companies face:

• Incidence of cumulative taxes
• Complexity in complying with tax obligations
• High taxation on inputs, machinery and energy

This scenario contributes to the loss of international competitiveness, making it difficult to export Brazilian products and reducing the capacity to attract foreign investment.

Sustainable alternatives to alleviate the tax burden

A CNI proposes more balanced and sustainable solutions to Brazil’s fiscal problem, avoiding further penalizing the industrial sector. The main recommendations include:

• Effective control of public spending: Reducing inefficiencies and increasing public sector productivity.
• Progress of structural reforms: Especially the Tax reform and Administrative Reform, which can simplify the system and reduce operating costs.
• Improvement in State management: With a focus on digitalization, transparency and process rationalization.
• Taxation of current low contribution sectors: Like online betting market, which moves billions and is still little taxed.

These alternatives aim to generate revenue more fairly, without further compromising the investment capacity, innovation and job creation in the industry.

Conclusion: the impact of the tax burden goes beyond industry

Discuss the impact of tax burden on Brazilian industry is not just a business concern. It is a topic with direct consequences for the consumer, the worker and national economic development.

If Brazil wants to resume growth consistently, it is essential review the collection model, seeking a balance between the State's fiscal needs and the industrial sector's productive capacity.

Indiscriminate tax increases can slow growth, reduce competitiveness and harm society as a whole.

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