Tax Reform and Financial Automation: Why This is the Time to Mature Your Finance Team

Brazil's tax reform represents the most significant structural change in the tax system in recent decades. It alters the taxation of goods and services, redefines competencies among the Union, states, and municipalities, and introduces new principles for revenue collection in the country.

Beyond the legal and fiscal debate, the reform is relevant because it directly impacts how companies operate financially. It demands greater data clarity, more consistency in records, and more predictability in processes. For finance leaders, this means the reform is not just a compliance issue — it's an operational structure issue.

In practice, the reform exposes something that has always been present but often diluted in daily operations: the maturity level of the finance team and the processes that support it.

It is in this context that financial automation ceases to be a merely punctual efficiency initiative and becomes a necessary condition for safely navigating the transition.

The Reform Isn't Just About Taxes. It Changes the Logic of Taxation.

While the reform is, in essence, a change in the tax system, its impact extends beyond the creation or replacement of taxes. It alters the logic of how and when taxes are calculated, credited, and distributed.

The principles guiding the reform — simplicity, transparency, neutrality, cooperation, and tax justice — do not merely materialize in legal text. They require financial processes capable of upholding these ideas in practice.

Simplicity presupposes fewer exceptions and fewer manual adjustments. Transparency requires data and calculation traceability. Neutrality demands consistency and comparability of information. Tax justice requires accurate, replicable, and auditable calculation.

These demands directly clash with financial environments that are excessively manual, reliant on parallel spreadsheets, informal validations, and tacit knowledge concentrated in individuals.

In this sense, the reform doesn't create new operational problems. It makes existing fragilities visible.

Dual VAT: What Changes and Why it Matters for Finance

One of the pillars of the reform is the creation of the so-called Dual VAT (Value Added Tax), which replaces current taxes with two new ones:

• CBS (Contribution on Goods and Services), administered by the Union, replacing PIS and COFINS
• IBS (Tax on Goods and Services), administered by states and municipalities, replacing ICMS and ISS

The central objective of VAT is to tax only the value added at each stage of the chain, eliminating cascading taxation.

In practice, this profoundly changes the demands on financial processes. To accurately calculate the tax, it's necessary to have clarity on each stage of the operation, consistency between input and output data, and integration between systems.

Companies that currently "close the books" with manual adjustments will likely feel this impact quickly. VAT does not tolerate improvisation well. It requires structured processes, reliable data, and financial process automation that reduces dependence on recurring human corrections.

Here, financial automation ceases to be a competitive differentiator and becomes minimum infrastructure.

Destination-Based Taxation: When Data Becomes a Central Element

Another structural point of the reform is the shift from origin-based to destination-based taxation. This means that the tax will be collected where the good or service is consumed, rather than where it is produced or provided.

This change aims for greater tax justice and a reduction in the so-called “tax war.” At the same time, it significantly increases the demands on data and processes.

Correctly identifying the place of consumption is not trivial, especially in digital operations, recurring services, or distributed business models. This requires well-structured data, integration across departments, and the ability to process information at scale.

Without financial automation, the risk is clear: increased errors, rework, insecurity in calculation, and greater exposure to fiscal challenges.

The Reform as a Mirror and Opportunity for Finance

In practice, the tax reform functions as an organizational stress test. It reveals how much finance relies on manual effort to function and how prepared its processes are for structural changes.

More mature finance teams tend to view the reform as a transition project, with clear stages, conscious prioritization, and structural investments. Less structured teams end up reacting with successive urgencies, creating even more manual work to cope with the complexity.

At the same time, the reform creates a rare opportunity. It legitimizes the need to review processes, invest in financial automation, and abandon improvised solutions that have been tolerated for years.

Financial Automation as a Foundation for Absorbing Regulatory Change

In times of regulatory change, it's common to seek specific solutions: a new spreadsheet, a manual adjustment, an additional control to “ensure closing.”

In the short term, this solves the problem. In the medium term, it increases complexity.

Financial automation works in the opposite direction. It forces finance to map processes, explicit rules, integrate systems, and reduce reliance on specific individuals. This creates a more resilient operational foundation, capable of absorbing regulatory changes without collapsing the team's routine.

More than efficiency, it's about adaptability.

AI in Finance from the Perspective of Tax Reform

The advancement of AI in finance is directly connected to this scenario. Global surveys indicate that most companies already use AI in some financial process, and almost all plan to expand this use in the coming years, especially in areas such as accounting, FP&A, treasury, and risk management.

From the perspective of tax reform, AI takes on an even more sensitive role. It can accelerate analyses, simulations, and validations, but only when operating on well-defined processes and reliable data. The reform makes this clear: AI does not fix fragile structures. When applied to poorly designed processes, it merely scales errors. When combined with well-structured financial automation, it becomes a real lever for predictability, scale, and risk reduction.

A Rare Window to Mature the Finance Team

Moments of significant regulatory change do not happen frequently. When they do, they are usually treated merely as obligations. But they also serve as catalysts for maturity.

Tax reform obliges companies to revisit processes, review systems, and rethink routines. For finance leaders, this is the time to question what is structurally fragile and what can be rebuilt more sustainably.

Financial automation does not eliminate the complexity of the Brazilian tax system. But it creates the conditions to deal with it with less risk, lower cost, and greater predictability.

Tax Reform, Financial Automation, and the Next Level of Finance

Ultimately, the question isn't whether the reform will impact finance. It will. The question is whether the team will navigate this period by accumulating improvisations or by building a more mature foundation.

Companies that use this moment to invest in financial automation, financial process automation, and responsible AI use tend to emerge from the transition with a more strategic, reliable, and business-aligned finance function.

Tools that allow for structuring processes, integrating data, and applying rules clearly cease to be mere support and become a central part of the financial strategy. It is in this context that platforms like Abstra help finance teams transform a regulatory requirement into a real opportunity for maturity.

👉 If tax reform has already challenged your processes, this is a good time to go beyond legal compliance. Financial automation isn't about "automating everything," but about creating a solid foundation of processes, data, and rules that allows finance to navigate regulatory changes with more predictability and less manual effort.

At Abstra, we help finance teams structure financial process automation and AI use gradually, with governance and a focus on what truly unlocks operational maturity — especially during transition periods like tax reform.

👉 Discover how Abstra can support your finance department's next step at https://www.abstra.io/