The Department of Finance of the Sao Paulo state has changed the basis of calculating the Tax on Circulation of Goods and Services (ICMS) for hygiene products and perfumes sold under the door-to-door system, besides electrical materials. Companies in these sectors collect the tax in advance on behalf of the entire production chain, through a scheme called the tax substitution.

Most of the changes elevates the tax burden of the products . They were instituted by Ordinance of the Coordination of Tax Administration (CAT), published in the Official Gazette on Wednesday. Each entrance has a table with the Index Value Added Tax (IVA) for each product.

The IVA for the calculation of  the ICMS for the industry, for instance, of the shampoo rose from 157.65% to 237.96%. The measure comes into force on August 1.