Abicalçados: “New 20% Tax on Digital Platforms Partially Addresses Industry Concerns”

The Brazilian Congress Lower House approved a bill on Tuesday night (28) to reimpose taxes on remittances up to $50 from international e-commerce platforms. This decision follows significant pressure from the national industry, particularly the Brazilian Association of Footwear Industries (Abicalçados), which views the new 20% import tax as a step toward establishing fairer tax conditions for domestic businesses. The bill now advances to the Federal Senate and, if approved, will await presidential assent.

Haroldo Ferreira, Executive President of Abicalçados, described the 20% rate as a compromise between the demands of the national industry and the complete exemption previously set by the Federal Government. “We have consistently warned that a zero rate for international e-commerce platforms was effectively exporting Brazilian jobs, especially to Asia, from where many remittances originate. It is unfair for our domestic industry to pay cascading taxes while competing with untaxed imports,” Ferreira stated. He emphasized that this tax exemption threatened thousands of jobs within Brazil’s footwear industry due to the unfair competitive landscape. “Furthermore, society must understand that the availability of tax-free platforms is meaningless if it comes at the cost of local employment,” he added.

Ferreira commended the efforts of the National Congress, particularly Chamber of Deputies President Arthur Lira, for recognizing the urgency of reinstating the tax on international e-commerce purchases. “The Brazilian footwear industry is productive, high-quality, and sustainable, but it needs basic conditions to compete fairly with major international players. The 20% rate addresses part of this challenge,” he concluded.

The chart that follows uses DataLiner-derived data to show Brazilian footwear imports between January 2021 and March 2024, measured in TEUs.

Brazil Footwear Imports | Jan 2021 – Mar 2024 | TEUs

Source: DataLiner (click here to request a demo)

Background Information

The new tax regulations stem from MF Ordinance No. 612/2023, published on June 30, 2023, which amended the previous MF Ordinance No. 156/1999. The changes, effective from August 1, 2023, initially reduced the import tax rate to 0% on online purchases up to $50, even when the sender was a legal entity. This shift led to significant mobilization within the national industry due to the competitive imbalance it created. The reinstated taxation is now part of the broader bill that introduces Mover (Green Mobility and Innovation Program), a government initiative aimed at decarbonizing the automotive sector.

Source: Abicalçados

The opinions expressed here do not necessarily express Datamar’s official position.

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