TAX REFORM AND SOCIAL PROTECTION: FROM PIS/COFINS-CBS TRANSITION TO FINANCIAL TAXATION PERSPECTIVES AS A GUARANTEE FOR SOCIAL SECURITY

Abstract

This article investigates the intersection between Brazil's Tax Reform and social security financing, focusing on the transition from PIS/COFINS Contributions to the new Contribution on Goods and Services (CBS). Given the recognized complexity of the national tax system, the reform aims for simplification and efficiency, yet this study identifies crucial challenges for the sustainability of social security, a fundamental right. The CBS, with its broad non-cumulativeness and "out-of-tax" incidence, is detailed, analyzing its potential revenue impacts. Critically, the text highlights the volume of tax waivers (R\$ 290.465 billion in 2024, ANFIP), which transform a potentially surplus social security budget into a deficit, and the negative effects of the Pension Reform (EC nº 103/2019) on benefit values. Concurrently, financial transaction taxation is explored as an alternative financing mechanism, assessing its revenue potential and constitutional aspects through the lens of Paulo de Barros Carvalho's General Theory of Tax Law. It concludes that the reform's success requires reconciling economic efficiency with social effectiveness, ensuring robust funding for social security and the rights inherent to citizenship.