The Extrafiscal Function of the Selective Tax from the Perspective of the Jurisprudence of the Federal Supreme Court on Extrafiscality of Taxation

Abstract

This article analyzes the extrafiscal function of the Selective Tax (IS), created by Constitutional Amendment No. 132/2023 and regulated by Complementary Law No. 214/2025, within Brazil’s tax reform context. It examines the IS’s incidence on goods and services harmful to health and the environment, highlighting its role in encouraging behavioral change and safeguarding fundamental rights. The study distinguishes between extrafiscal and revenue-raising aims, addressing constitutional grounds and Supreme Federal Court (STF) jurisprudence on tax extrafiscality. It also discusses challenges such as the need for regular tax performance reviews, risks of expanding illicit markets, and the importance of governance and social control mechanisms. The article concludes that the IS represents progress in employing taxation as a public policy tool, fostering sustainable development and collective well-being, provided that constitutional limits and effective monitoring are observed.