Novos dilemas financeiros do Estado social brasileiro pós-reforma tributária

Based on Federal Constitution of 1.988, Brazilian Federative Republic established, as targets, to reduce regional inequalities and provide to the Brazilian people essential social rights, ensuring them minimum conditions of living and existing. This commitment reaches the Union, States, Federal District and Municipalities and to enable them to do so, Brazilian Constitution granted them with tax and financial autonomies. Even though, Social State challenges had always been huge, once Brazil is a continental country and extremely heterogeneous socially and economically, what makes the current scenario still very far from the ideal level of development, but progress was made. On the other hand, as soon as Constitutional Amendment number 132/2023 was enacted, national tax and financial systems were deeply changed, and a redesign of fiscal and financial federalism on tax consumption was brought, now focused on the Union, but ensured the possibility of subnational entities to participate in a committee, whose attributions and variables are not defined yet by the complementary lawmaker. The starting point will be to check if destination principle, elected as a criteria to share tax collection between 27 States and 5.570 Municipalities will be able to ensure enough financial resources to all these entities. It seems the answer is negative, once there is a trend that States and Municipalities that acquire more goods and services will be benefitted in comparison to the others. For those, with fewer resources available, choices will be more tragic than ever, in such way they will have to rethink how they deal with public administration, “to produce more with less”. This paper, considering its limitations, seeks to identify these challenges and propose suggestions to overcome them.