Import tax cut affects 15% of Brazilian capital goods imports, mainly benefitting China

According to the National Confederation of Industry (CNI), the 10% reduction in the Import Tax on capital goods (BK) and information technology and telecommunications (BIT) will affect 15% of total Brazilian imports and will especially benefit China.

The entity’s calculation shows that the reduction announced by the federal government affects a total of 924 products in these two segments. In 2020, they accounted for US$ 24 billion or 15% of total Brazilian imports. On average, the import tariff for them will fall from 13.6% to 12.2%.

The numbers also show that China is the main source of imports of these products. In 2020, the Asian country accounted for US$ 7.5 million or 31% of Brazilian purchases of capital goods and products in the computer and telecommunications sector.

See the graph below for a comparison of first-quarter cargo movement between Brazil and China from 2018 to 2021:

Cargo handling between Brazil and China | 1st. Quarter 2018-2021| TEU

Graph source: DataLiner (click here to request a demo)

Ranking second is the European Union (US$2.9 billion or 12%), then the United States (US$2.3 billion or 10%), and Japan (US$934 million or 4%). Vietnam ($774 million or 3%) and South Korea ($692 million or 3%) rank fifth and sixth, respectively.

The sector affected the most will be vessels and floating structures; mechanical machines and apparatus; and electrical machines and appliances. Drilling or exploration platforms, light boats, and cranes; and other parts for telephony and telegraphy apparatus will also be affected.

Source: Comex do Brasil

To read the full original article, access the link below:

https://www.comexdobrasil.com/corte-no-imposto-de-importacao-para-bens-de-capital-atinge-15-das-compras-externas-brasileiras/

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