States want to increase ICMS on imported products up to US$50 from 17% to 25%

The 26 states and the Federal District will discuss this week the possibility of increasing the ICMS on the purchase of imported products up to US$50 from the current 17% to 25%. The adjustment occurs nine months after the tax was equalized across the country at the request of the productive sector, as the charge has always existed at different rates.

However, since the government implemented the Conforming Remittance program, which established guidelines for the import of products up to US$50 purchased online, Brazilian industries began to criticize heavily, alleging unfair competition. There is a discussion about resuming the import tax, but there is still no forecast for it.

Until there is a government decision on this, the states have set out to increase the ICMS rate at the request of industries, which will be discussed at a meeting of Finance secretaries this Wednesday (13). According to Carlos Eduardo Xavier, president of the National Committee of Finance Secretaries (Comsefaz), the objective now is to equalize the taxes charged for foreign purchases to what Brazilian industry pays to the government – ​​which can reach 22% depending on the state.

“The idea is to unify this rate again at a value that is the same for all states at around 25%. This will, in addition to bringing more revenue to the states, also bring competitive equality between goods produced within Brazil and those purchased outside Brazil on these digital platforms,” he said in an interview with GloboNews this Monday morning (11).

The increase in taxation on purchases made on digital platforms has become a frequent request from the productive sector to the government and reached a climax at the beginning of this year when the national confederations of Industry (CNI) and Commerce of Goods, Services and Tourism (CNC) appealed to the Federal Supreme Court (STF) against the import tax exemption for low-value goods intended for individuals.

Xavier explains that if the opposite path were adopted, reducing the tax burden for industry to match that charged on imports, it could put the creation and maintenance of jobs in the country at risk. And it would also affect the continuity of public policies of the states themselves, such as “education, health and security, for example”.

“It’s a discussion that has much more to do with creating and maintaining jobs than with revenue. […] It is through taxes that states, the Union and municipalities fulfill their obligations and provide public services to society. This discussion cannot be done halfway, the size of the tax defines the size of the State”, he highlighted.

The adjustment to the ICMS charged on imported purchases up to US$50 from the current 17% to 25%, if approved, will need to be regulated by September to come into force only at the beginning of 2025.

On the other hand, within the government itself there is discussion of resuming the import tax, and vice-president Geraldo Alckmin (PSB) himself has already shown himself in favor. In November last year, he stated that the implementation of the Conforming Remittance program and the application of the ICMS equally to all states were the first step.

“What do I defend? Competitive freedom. (…) But there is no decision taken in this regard”, he said at the time, who also serves as Minister of Development, Industry, Commerce and Services (MDIC).

Minister Fernando Haddad, of Finance, confirmed that there are internal discussions, but that the topic “is controversial in the government and in Congress” and that a decision on this will only be taken if there is “maturation”. The possibility of resuming the import tax also occurs at a time when the government is trying to maintain the goal of eliminating the deficit in this year’s public accounts, requiring more revenue.