For someone arriving from abroad, a weaker local currency usually translates into greater purchasing power. With the same euros or dollars, visitors can access more services, dine at better restaurants or extend their stay by a few days. However, this apparent advantage does not by itself guarantee a cheaper holiday, because the final price also depends on other factors, including the taxation borne by tourism businesses.
This is where the tax reform already approved in the country comes into play. The new model replaces several consumption taxes with a dual VAT made up of two complementary levies. The first is the Contribution on Goods and Services, known as CBS, which is federal. The second is the Tax on Goods and Services, or IBS, which corresponds to states and municipalities.
The combined rate of both taxes has not yet been set, and that uncertainty has caused concern in the business community. The Federation of Industries of the State of São Paulo, Fiesp, has warned that the combined burden could exceed 30 percent. It should be stressed that this is an estimate and not an approved increase, much less a rate that will apply immediately.
The calendar also calls for caution. The Receita Federal, Brazil's tax administration, places the end of the transition period in 2033. During these years the old and new systems will coexist progressively, which will force companies to handle changing rules and to plan over a long horizon.
Tourism does, however, have specific treatment. Complementary Law 214/2025 provides for a 40 percent reduction on the general rates for certain operations of hotels, bars and restaurants. The benefit also extends to theme parks and amusement parks, two relevant pieces of the country's leisure offer.
That said, this reduction does not amount to a 40 percent discount on the bill paid by the customer. The effective burden will depend on the specific rules applied in each case, on how the reference rates evolve and on companies' ability to offset tax credits along the chain. For that reason, the real impact on prices will differ depending on the type of business and its cost structure.
In this context, some of Brazil's best-known destinations could become more attractive. Rio de Janeiro, Salvador de Bahia and Florianópolis are among the cities that would become more competitive for international visitors if the depreciation of the real is sustained over time. Their beaches, cultural heritage and urban life thus add an economic argument that can weigh on travellers' choices.
For the sector, by contrast, the moment demands attention. Hotels, restaurants, bars, parks and tourism companies as a whole will have to adapt to new tax obligations and review their cost structures in detail. Good preparation will make it possible to take advantage of the pull of foreign demand without the tax transition eroding margins or forcing price increases onto customers.
The conclusion, for now, is open. Until the transition ends it will not be possible to say with certainty whether the combined effect of a weaker real and the new tax system will make holidays in Brazil cheaper or more expensive. What does seem clear is that the country faces a decisive stage, in which the stability of its currency and the final application of the reform will set the course of one of Latin America's most important tourism markets.
