Brazil Lifts Wine From ST Tax Regime After Business Sector Pressure

The business sector in Mato Grosso (Brazil) is celebrating a new state decree that removes wine from the Substituição Tributária (ST) tax regime. The measure, published this week, responds to a longstanding demand from local distributors and retailers who have argued that the previous system created unfair competition and hindered growth in the wine market.

Representatives from the Associação Mato-grossense de Atacadistas e Distribuidores (AMAD) visited the State Legislative Assembly to thank state representative Dilmar Dal Bosco for his role in negotiating with the state government. The meeting included business leaders such as Tião da Zaeli, Luciano da Sorpan, and Marcos Taveira. They emphasized that the change will help level the playing field for legal businesses and encourage fairer competition.

Under the ST regime, taxes on certain products are collected in advance at one point in the supply chain, usually from manufacturers or importers. This system was designed to simplify tax collection and reduce evasion but has been criticized by wine distributors and retailers in Mato Grosso. They argue that it increased costs and made it harder for smaller businesses to compete with larger players or those operating outside legal channels.

With the removal of wine from this regime, companies will now pay taxes based on actual sales rather than estimated values set by the government. Business leaders say this will allow for more accurate pricing, reduce financial pressure on distributors, and make it easier for new businesses to enter the market. They also expect that consumers could benefit from more competitive prices and a wider selection of wines.

The AMAD representatives stated that this change is likely to strengthen legal commerce in Mato Grosso by reducing incentives for informal trade. They believe it will also encourage investment in distribution networks and retail operations across the state.

The decree comes at a time when wine consumption in Brazil is growing steadily. According to industry data, national wine sales increased by 12% last year, with Mato Grosso showing similar trends. Local businesses hope that the new tax policy will help them capture a larger share of this expanding market.

State officials have not released projections on how the change might affect tax revenues but say they expect increased compliance and formalization of trade to offset any short-term losses. The business community remains optimistic that the measure will bring lasting benefits to both entrepreneurs and consumers in Mato Grosso.