Tax reform

a brief analysis of federalism reshaped by EC 132/2023 from the perspective of Niklas Luhmann

Abstract

Constitutional Amendment No. 132/2023 introduced one of the most significant reforms to the Brazilian tax system since the 1988 Constitution, notably by partially replacing the traditional model of tax competence allocation with a shared competence framework, particularly in relation to the Tax on Goods and Services (IBS). This article examines this transformation through the lens of Niklas Luhmann’s theory of legal autopoiesis, with special attention to the federative principle and the constitutional limits on the power of amendment. It argues that federalism holds a structurally foundational role within Brazil’s constitutional tax system, serving as a key criterion for the distribution of taxing powers among the Union, States, Federal District, and Municipalities. Based on systems theory, the study investigates whether the tax reform constitutes a legitimate adaptive response of the legal system to economic and political pressures or whether it represents a structural rupture capable of undermining the federative identity enshrined in the 1988 Constitution.