Daily Call: TIM’s CEO flags negative tax reform impact in 2027; Neutral long term

Research evidence excerpt

Daily Call: TIM’s CEO flags negative tax reform impact in 2027; Neutral long term

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Daily Call

TIM’s CEO flags negative tax reform

impact in 2027; Neutral long term

Industry Overview

Sales tax to increase for telcos in 2027 20 May 2026

According to a report from Valor Econômico, TIM Brasil’s CEO, Mr. Alberto Griselli, Equity

stated that while he expects Brazil’s tax reform to have a broadly neutral impact on Latin America

telecom operators over the long term, the immediate effects starting in 2027 should be Daily Call

negative. Mr. Griselli added that he expects operators to be compensated over time Rogerio Araujo >>

through tax credits. Our take: TIM’s management comments are broadly in line with our Research Analyst

view that most Brazilian telecom operators should face a particularly negative impact Merrill+55 11Lynch2188 (Brazil)4255

from the tax reform in the short term, starting in 2027 (see: Brazil Tax Reform rogerio.araujo@bofa.com

Handbook). As a reference, we estimate TIM’s sales tax burden could increase by 4.4p.p Lucca R Brendim >>

Research Analyst

in 2027, while Vivo’s should increase by 2.7p.p, versus only 0.6p.p for Claro Brasil Merrill Lynch (Brazil)

(America Movil). Beyond the near-term negative impact for the sector overall, we +55 11 2188 4100

lucca.brendim@bofa.com

continue to see a relative asymmetry among operators, as the reform appears

structurally more negative for TIM, slightly negative for Vivo, and close to neutral for

Claro. In our estimates, however, the overall impact of the reform should remain

negative for both TIM and Vivo even over the longer term. We maintain our

Underperform rating on TIM and Vivo, and Neutral on America Movil.

Exhibit 1: TIM sales tax rate could increase by 4p.p already in 2027