Government approves 20% tax on products up to $50: Impacts on Commerce

The Chamber of Deputies recently approved a bill that imposes a 20% tax on international purchases up to US$50. This new measure will end the existing exemption, which mainly benefited consumers on popular platforms such as Shein, AliExpress and Shopee. The project, following an agreement between Congress and the federal government, now goes to the Senate for analysis.

This legislative change is part of a broader effort to balance the trade balance and increase tax revenue. The implementation of this tax will have direct implications for Brazilian consumers, who often access low-cost foreign products through e-commerce sites.

For example, sites like Shein and AliExpress will be heavily affected, since a large portion of purchases made on the platforms are for amounts less than US$50. This new fee may discourage some of these transactions, impacting both consumers and sellers.

Context of the Tax Measure

The government approves a 20% tax on products up to $50

The Chamber of Deputies recently approved a project that establishes a 20% tax on international purchases of up to US$50. This measure is part of an effort to increase revenue and regularize electronic commerce.

The end of the exemption for purchases of up to US$50 aims to equalize competitiveness between imported products and those sold locally. The measure impacts popular platforms such as Shein and AliExpress.

Approval and Implementation:

  • The vote in the Chamber took place on May 28, 2024.
  • The proposal now goes to the Senate for consideration.

In addition to the 20% Import Tax rate, there are other taxes that may apply to purchases, including ICMS. The effective tax rate can add up to around 44,5% when all taxes are considered.

Beneficiaries of the Measure:

  1. Federal government: The expectation is to increase tax revenue.
  2. Local market: Favors local sellers by reducing the price advantage of imported products.
  • Presidents of the Chamber and Senate: Arthur Lira and Rodrigo Pacheco, respectively, argue that the measure is a necessity for the current moment.
  • Innovation Sector: Linked to the Green Mobility and Innovation Program (Mover), which was also approved.

Impact on the Consumer

The implementation of a 20% tax on international purchases of up to $50 will have direct effects on the purchasing power and reaction of Brazilian consumers.

Change in Purchasing Power

The new 20% tax applies an additional burden to consumers who make international purchases of up to $50, especially impacting those looking for cheaper products that are often not easily found in the domestic market. This tax may reduce the frequency of these purchases, as the cost-benefit decreases with the new rate.

Consumers who depend on imports to purchase certain products may feel the impact on their budget. For example, when purchasing a $50 gadget, the consumer would now have to pay $60. This difference can be significant for those who make several small purchases throughout the year.

Consumer Reaction

There is an expectation of dissatisfaction among consumers, who see the measure as an increase in the price of products accessible on the international market. Many may express discontent on social media and through other digital platforms, suggesting widespread disapproval for the fee.

Furthermore, the increase in costs could lead consumers to look for alternatives within the national market or choose to reduce non-essential purchases. Trust in the government could be shaken, impacting the general perception of recent economic policies.

Influence on the Market

The approval of the 20% tax on international purchases up to US$50 will have significant implications for consumers and businesses, affecting prices, supplier strategies and the dynamics of e-commerce.

Effect on Prices

The new 20% tax on international purchases up to $50, such as on sites like Shein and AliExpress, will lead to a direct increase in prices.
Consumers who were accustomed to purchasing products at lower prices may see a significant increase in the total costs of their purchases.

This can reduce the volume of international purchases of low-value items, as the cost-benefit ratio will be lower.
Consumers can opt for local alternatives or wait for promotions that can offset the tax or include free shipping to justify the purchase.

Supplier Response

International suppliers will need to adjust their strategies to remain attractive in the Brazilian market.
Some may absorb some of the additional cost to keep their prices competitive, while others may focus on more robust marketing campaigns to justify the added value of the products.

Companies like Shein and AliExpress can expand partnerships with influencers and use specific promotions to minimize the tax impact and maintain customer loyalty.
Another possible strategy is the adaptation of supply chains, seeking more efficient ways of shipping and distribution.

Impact on Electronic Commerce

E-commerce will be directly impacted by the new tax, with a possible slowdown in small-scale international sales.
Platforms that rely heavily on low-cost products may see a reduction in order quantity, affecting their trading volumes and logistics.

However, as consumers adapt to new regulations, there may be a greater demand for products that offer better value for money despite taxation.
This could favor local stores that offer competitive alternatives or even lead to increased interest in resellers who purchase products in larger volumes to distribute internally with competitive margins.

Government Positioning

The Brazilian government explains the need for a 20% tax on imported products of up to US$50. In addition, revenue forecasts and plans for the use of the resources obtained are presented.

Tax Justification

According to the government, the 20% tax on imported products worth up to US$50 aims to balance competitiveness between markets. Foreign products have tax advantages that harm local traders.

Another point is the fight against tax evasion. Many international purchases avoid taxes due to exemptions, negatively impacting public revenue.

The measure is also a response to recent political agreements, where the National Congress and the federal government decided to review old tax benefits.

Revenue Forecasts

The implementation of the 20% tax is estimated to generate a significant increase in revenue. Based on market data, the measure is expected to increase revenue to hundreds of millions of reais.

Statistics suggest that international trade in small amounts is frequent. Thus, taxation of up to $50 will be a constant source of income.

The forecasts also consider the impact on consumption. Despite the new tax, demand for international products may continue due to diversity and competitive prices.

Use of Funds Raised

The resources obtained by the new tax will be directed to essential sectors. The government plans to invest in infrastructure and social improvements.

Education and health are highlighted priorities. Improvements in public schools and hospitals will be financed by the resources raised.

Other areas, such as public security and technology, will also receive investments. Administrative modernization and strengthening the economy are among the objectives.

With these investments, the government aims to promote sustainable and balanced growth, benefiting society as a whole.

Economic analysis

The approval of the 20% tax on international products up to $50 has significant financial impacts. This tax changes the dynamics of online commerce and the competitiveness of imported products.

Economic Impact Estimates

The implementation of the tax could reduce the volume of international purchases by up to $50, negatively affecting the ecommerce. Small traders and consumers who rely on imports to obtain competitively priced goods will feel the impact most acutely.

Potential Effects:

  • Increase in prices of imported products.
  • Decrease in international purchases of lower value.
  • Encouraging the consumption of national products.

Projections indicate that the government can collect $ 2 billion additional fees annually with the new taxation. However, this estimate depends on the elasticity of demand, that is, how consumers will react to higher prices.

Comparison with International Policies

Internationally, several countries apply similar taxes to imported products, but the rates and exemption limits vary. For example, the European Union has a standard tax rate of 20% for most imported products, but offers exemptions for specific items.

In the United States, there is a tax-free limit on purchases under $800. This discrepancy makes Brazilian policy more rigorous compared to other developed economies.

These variations directly influence the competitiveness of markets. Countries with higher exemption limits are generally able to maintain lower prices for end consumers, encouraging online retail trade.

Brazilian merchants and consumers will need to adjust to these changes, possibly favoring local alternatives and adjusting their purchasing strategies.

Social Repercussion

The approval of the 20% tax on international purchases of up to US$50 generated diverse reactions among the population and mobilized groups from different sectors, reflecting the direct impact on consumer behavior and collective actions.

Public opinion

The general public is quite divided regarding the measure. Some consumers complain that the new tax will represent an increase in the cost of previously affordable imported products. They argue that this limits access to goods that are not produced or available on the national market, negatively impacting purchasing power.

On the other hand, there are those who see taxation as a necessary way to protect the national industry. These individuals believe that the tax can encourage the purchase of products manufactured in Brazil, promoting employment and strengthening the local economy.

The discussion is also reflected on social media, where hashtags for and against the measure gain strength. Comments discussing the merits and potential impacts proliferate on platforms like Twitter and Facebook.

Mobilizations and Protests

Consumer groups and associations Consumer defense have organized demonstrations against the tax. They plan to hold protests in several Brazilian capitals to pressure the government to reconsider the measure.

Some organizers have already called for marches and public events, claiming that the measure was approved without adequate consultation with the population. The schedule of the demonstrations is being widely publicized on social networks and messaging applications.

Additionally, online petitions against the taxation gained thousands of signatures within days. The mobilization includes both individual consumers and small traders who depend on importing products for their stores.

These actions show strong discontent and a collective desire to make consumers' voices heard by the government.

Frequently Asked Questions

The recent approval of the 20% tax on imported products worth up to 50 dollars is generating several doubts. This document clarifies the main points about this new regulation and its implications.

Why did the government decide to tax items worth less than $50?

The government decided to implement the tax to close loopholes used by foreign companies. These companies were selling products without paying due taxes, damaging the local economy.

What was the process of approving the new tax on low-value imports like?

The Chamber of Deputies approved the proposal after an agreement between Congress and the federal government. The base text now includes taxation of imported products worth up to 50 dollars at a rate of 20%.

Is there any minimum import value exempt from taxation after this new 2024 regulation?

With the new regulation, all international purchases of up to 50 dollars will be taxed at a rate of 20%, with no exceptions for low-value imports.

Does the 20% tax on products under $50 affect all import categories?

Yes, the fee applies to all categories of imported products up to $50, including purchases made on popular websites like Shein and AliExpress.

How can I calculate the tax amount on an import of products below 50 dollars?

To calculate the tax, apply the rate of 20% to the value of the product. For example, for an item that costs $30, the fee will be $6.

What was the government's justification for establishing this new tax on imported products worth up to 50 dollars?

The government's main justification was to balance competition between local and foreign companies, ensuring that all pay adequate taxes and contribute to the national economy.

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