Government will charge tax from Shein, Shopee etc., but still doesn’t know how – 09/30/2023 – Vinicius Torres Freire

Retail businesspeople have approached government officials to ask for taxes to be charged on imports of products worth up to US$50 — beyond this value, the rate is 60%. For purchases through e-commerce platforms that adhere to the “Remessa Conform” program, there is no federal tax, only 17% ICMS (state).

People from the government say there will be a tax, but it is difficult to adopt any decision in less than two months. How much tax? Perhaps a rate between 20% and 25% (in addition to the 17% ICMS). It is also possible to discuss an increase in the state ICMS, to 25%. The matter is still unresolved.

At the beginning of the year, the Ministry of Finance tried to bring order to these imports and tax collection. He made a known mistake, as the measure is unpopular and fell into unsociable networks. In April, the Treasury took a step back, by order of President Luiz Inácio Lula da Silva.

In June, the Treasury launched “Remessa Compliance”, an attempt to resolve the business disorder. Platforms that adhere to the program, which requires information about shipments and prices, among others, could sell without paying federal tax. The system has been operating since August 1st.

So far, Shein and Sinerlog have “implemented” certification. Aliexpress, Market Livre and Shopee are “certified”, but “under implementation: requirements to benefit from the zero rate have not yet been met”, according to what was read on the Federal Revenue website at the end of Friday (29).

People at large Brazilian retailers are nervous. He wants government action before the biggest sales season, between Black Friday (end of October) and Christmas. He has taken his demands not only to the Treasury, but also to the Ministry of Development, the Ministry of Justice and even to “political” ministers from the Planalto, where it is said that national companies “will not remain calm”.

At the beginning of the year, the reaction to the Treasury’s unpopular initiatives came from “Planalto”. At the Ministry of Justice there must be some investigation into fraud in imports through the platforms.

At the Farm, we try to understand the size of the problem. Until the beginning of the year, only 2% of shipments were inspected. Now, the rate approaches 40%. There is beginning to be more information about this type of commerce and fraud. An attempt is made to estimate the size of the revenue loss as well.

Imports via electronic platforms exploded between 2017-2019. In 2018, around 70 million shipments arrived. In 2022, 178 million. From January to July this year, there were 123 million volumes. In August 2023 alone, there were 20 million. If this is the average for the rest of the year, 223 million packages would arrive in 2023.

As for rates, studies are being done on how to define a level of taxation that “guarantees equal competition”, without excessive protection for national companies (many want a 60% rate) and harmful facilities for foreign companies. A government “technician”, without decision-making power, says that, given the average import rates in Brazil, it would be possible to think of something like at least 25%.

Retail people complain about unfair and illegal competition. In addition to there being no federal tax, there would be smuggling (“packages within packages”) and under-invoicing. They say that imported products do not have certification and labels regarding the quality, safety and composition of the products. Retail, industry and jobs lose.

Whatever the government does about taxes, there will be problems. Leaving the national company without any protection will cause losses. Charging tax will irritate the consumer.

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