CNI and CNC go to the STF against exemption for US$50 purchases – 01/17/2024 – Market

The CNI (National Confederation of Industry) and the CNC (National Confederation of Commerce of Goods, Services and Tourism) announced that they will file a lawsuit with the STF (Supreme Federal Court) to end the zero tariff policy on import tax for small value goods that are sent to individuals in Brazil.

The confederations claim that the rules that allow this tax exemption contradict the Constitution as they violate principles of equality, free competition and national development.

For entities, this type of tax relief has no equivalent among transactions within the country, which end up “fully” bearing the tax burden.

“Current economic data show that the total relief from import taxes results in a relevant negative impact on national indicators, such as GDP growth, employment, payroll and tax revenue,” the entities said in a statement.

“In 10 years, between 2013 and 2022, small-value imports jumped from US$800 million to US$13.1 billion, an amount that represented 4.4% of total imported goods in 2022”, they highlighted.

Until last year, legislation granted tax exemption only to remittances of up to US$50 sent from abroad from individual to individual, which did not include trade in goods.

Alleging that foreign retailers were circumventing the rule to sell products with the tax benefit irregularly, the government launched the Conform Remittance program in 2023.

The program authorized purchases on foreign e-commerce sites to be exempt from import tax for products worth up to US$50, while the general rate is 60% for items above that value.

The government, however, has already informed that it intends to create a tax for these small-value purchases after completing studies on the sector.

Regulating the issue involves a series of pressures, which led the government to postpone a plan to implement taxation last year.

While national retailers lobby for the tax on the grounds that there is unfair competition from foreign companies, the implementation of the tax faces political resistance and some from the electorate.

Additional reporting by Bernardo Caram