Ministério da Fazenda anuncia fim da isenção de impostos para compras internacionais abaixo de 50 dólares

Ministry of Finance announces end of tax exemption on international purchases under US$50

The Brazilian Ministry of Finance has announced that it will end tax exemptions on purchases made by individuals from international sellers priced under US $50. This decision is a demand from Brazilian businesses as they complain about the fragility in the taxation of foreign companies, which is creating unfair competition.

The decision will affect giant Asian companies like Shopee, Shein, AliExpress, and others, as well as Brazilian consumers. The change will come into effect officially only after the Brazilian government of Luiz Inácio Lula da Silva (PT) publishes a provisional measure.

The plan to tax foreign companies is to increase revenue by up to BRL 8 billion (~US$ 1.5 billion) and to combat tax evasion. Currently, the law allows the tax-free importation of goods for individuals, provided the total value of the goods does not exceed US$50.

Shopee responds

The Singaporean platform of the Sea Group, Shopee, released a statement regarding recent discussions and showed its position before the MP’s publication. The company believes that it complies with Brazilian market rules and “operates as a national company.”

“Different from other platforms that depend on the importation of products, Shopee’s focus is on connecting local sellers and consumers and helping Brazilian businesses thrive online. We operate as a national company,” the company said in a statement.

“Our team of over 1,500 employees serves more than three million registered local sellers. Our business model is completely different from a platform focused on international sales. Over 85% of orders come from Brazilian sellers (registered with CNPJ) who transact with local buyers,” it added.

Shein and AliExpress

While Shopee is trying to position itself as a national company, other Asian companies that clearly do not fit the model mentioned above have also spoken out about taxation. The Alibaba Group’s AliExpress said it plans to comply with local regulations.

“AliExpress is committed to providing Brazilian consumers with quality products and actively participating in the development of the local digital economy. Complying with regulations where we operate is our top priority,” the company said.

Shein, on the other hand, focused on its partnership with local sellers.

“The company emphasizes that, with its unique model of small-scale production and guaranteed demand, it produces quality and affordable products to meet the demand of its consumers. Besides, it spares no efforts to empower local communities, both economically and socially. Shein reiterates that it has also made efforts to establish partnerships with various suppliers and local vendors in the Brazilian market,” it said.

Businesses welcome the decision

Despite the backlash from international e-commerce players, Brazilian businesses have welcomed the decision The CEO of ViaQuatro, which manages line 4 Yellow of the São Paulo subway, José Eduardo Guardia, said that the introduction of taxes “is an essential decision for the Brazilian economy. It is a measure that prevents unfair competition, a problem that until then, had no solution.”

Brazilian companies have long argued they face an inherent disadvantage against global e-commerce giants as they have to pay tax, purchase local goods and services and face higher costs. This also puts small and medium-sized businesses in Brazil at a disadvantage.

Moreover, the introduction of taxes may boost the growth of the Brazilian economy, which is currently in a fragile situation. The COVID-19 pandemic has caused significant harm to many businesses and industries in the country, and the government must find ways to strengthen the national economy.

The government is expected to release the provisional measure soon. ViaQuatro CEO Guardia says he expects the Brazilian Congress to discuss and approve it quickly.

In conclusion, the end of tax exemption on international purchases under US$50 will impact big and small businesses in Brazil. International e-commerce companies will now have to compete on equal footing with local entities, boosting Brazil’s economy as a whole.