Worrying News: Brazilian Customers to Pay Import Taxes when Shopping Online from Asian Websites

Bad news for customers who are in the habit of shopping on websites such as Shopee, Aliexpress, and Shein. According to Brazil’s Ministry of Finance, customers will now have to pay import taxes at the time of making an international purchase, just as it already happens on marketplaces with other international retailers.

The decision was made after Brazil’s Finance Minister, Fernando Haddad, announced that Asian companies are already adhering to the “compliance plan” of the Federal Government. “What Finance Minister Fernando Haddad called ‘digital tax’ is the tax that already exists but will be collected at the source, before the shipment of the goods,” the Ministry said in a note.

In addition, the Ministry claims that the measure is being elaborated and will be detailed in the coming months. Thus, the intention is to carry out a “facilitated electronic collection” of the tax and “ensure fair competition so that the consumer is benefited in the short, medium, and long term.” Furthermore, the ministry also states that “it is important to point out that there will be no creation or increase in taxes, only the facilitation of electronic collection.”

But what exactly is this compliance plan that the Finance Minister has referred to?

According to Haddad, the company Shein will adhere to a “compliance plan” of the Federal Revenue. In addition to Shein, other Asian retailers, such as Shopee and AliExpress, have also confirmed their participation.

This move comes as part of President Lula’s push to increase tax revenues and enable the new fiscal plan presented to the National Congress. Among the measures announced were the taxation of all international shipments, including shipments of up to US$50 (about R$250) between individuals.

However, due to the negative reaction that the taxation of international purchases received, the government decided to backtrack and said it would maintain the exemption for personal shipments without commercial purposes. However, it maintained the plan to expand revenue monitoring to prevent tax evasion.

“Exemption [for shipments up to US$50] will not cease to exist for individuals. But the president asked us yesterday to try to resolve this from an administrative point of view. That is, to combat smuggling,” said Haddad. “The president asked me to try to resolve this administratively, using the power of the Federal Revenue Service’s supervision without the need to change the current rule,” he added.

The news is unlikely to be well-received by customers who are already struggling with the high prices of imported goods. As Brazil continues to struggle with the economic impact of the coronavirus pandemic, many consumers have turned to online shopping to find better deals. The imposition of new taxes is likely to be a setback for the e-commerce industry, which has been growing at an impressive rate in Brazil.

Many retailers have already expressed their concerns about the new policy. According to Tathi Lopes, Marketing Manager at Shopee Brazil, the company is committed to offering affordable and convenient international shopping to its customers. “Our goal is always to provide the best user experience, and we will continue to do so by offering alternatives that minimize any impact of the new tax,” she said.

Similarly, local retailers are also likely to face increased competition from big international e-commerce players such as Amazon, who may be better equipped to absorb the additional costs.

The move towards increased taxation is part of a wider trend in Brazil, and indeed globally. As governments struggle to balance their budgets, many are turning to taxes to increase revenues. However, the challenge is to find a balance between raising taxes and maintaining a favorable business environment that encourages economic growth and job creation.

For now, customers will have to brace themselves for higher prices when shopping on international e-commerce sites. And, as always, businesses will have to adapt accordingly and find new ways to remain competitive in an increasingly challenging environment.