Brazil currently has 5,570 municipalities spread out over 27
federated units, including the Federal District. And article 156,
item III, of the Federal Constitution provides that such
municipalities have taxing powers to implement a levy on services.
See the excerpt below:
"Art. 156. The
Municipalities have the power to implement levies on:
(...)
III - services of any nature not listed in art. 155, item
II, defined in supplementary law.
(...)
In this context, following the constitutional text, the
municipalities - and the Federal District - may implement and
collect a tax on an activity comprised of features that qualify
such activity as a service, provided that service is not taxable by
ICMS (i.e. interstate and intercity transport service and
communication service) and is also mentioned in a supplementary
law.
