Understand the change in the tax on imported products

The announcement that the government of Luiz Inácio Lula da Silva (PT) intends to end the exemption from the end of the import tax for remittances of up to US$ 50 between individuals generated a narrative dispute on social networks this week.

On the one hand, government allies and sympathizers argue that the measure is aimed only at combating tax evasion practiced by foreign retailers. On the other hand, opponents and critics consider the change a way to raise revenue at the expense of the lower-income population, which consumes goods imported through e-commerce due to lower prices.

According to the newspaper “Folha de S.Paulo”, the government would have mobilized influencers to contain the attrition. The first lady, Rosângela “Janja” da Silva, responded to a Twitter profile to say that the tax would be charged would not be charged from consumers, but from companies.

The Minister of Finance, Fernando Haddad, believes that the change should increase the Union’s collection by R$ 8 billion per year. But the decision to tax all international parcels, regardless of value or sender, even caused wear and tear on the PT. Members of the acronym consider that the measure can directly affect the popularity of the party and the government.

The Minister of the Social Communication Secretariat (Secom) of the Presidency of the Republic, Paulo Pimenta, even gave a “scolding” on members of the government after the measure was announced without the endorsement of the portfolio.

“If everyone says what they want, it causes noise and only brings a headache,” he wrote in a WhatsApp group. The end of the exemption was announced by the special secretary of the Federal Revenue, Robinson Barreirinhas, in an interview with the UOL portal.

Understand some of the main questions regarding the change in import tax:

Will the government create a new tax on website purchases?

No. The tax on international postal remittances already exists, but goods sent for up to US$ 50 (about R$ 250) sent from an individual to an individual are currently exempt from the charge. What the government intends is to put an end to this exemption, starting to tax all remittances that enter Brazil from other countries, with no distinction in treatment between goods sent by legal entities or individuals.

Why is the government going to end the exemption?

The government’s allegation is that sellers from other countries have used the benefit granted to individuals and low-cost objects to evade taxes, through fraudulent declarations of the sender and value of the goods.

According to the Federal Revenue, remittances by individuals of goods with a relevant value currently “are absolutely inexpressive”, and the exemption would be serving only “for generalized fraud”.

How much is the import tax?

Ordinance 156, from 1999, of the Ministry of Finance, establishes a tax rate of 60% on the value of imported products, including freight and insurance. According to the IRS, there will be no tax increase. In addition to the exemption on remittances of less than US$ 50 between individuals, which should be abolished, there are other situations in which the tax is not charged.

The rule provides for a zero rate, for example, in the case of drugs imported by individuals for their own use, up to a limit of US$ 10,000. Also exempt from taxation are samples without commercial value acquired by legal entities when the purpose is to demonstrate their characteristics.

The importation of books, newspapers and periodicals is also exempt from the tax; musical phonograms and videophonograms produced in Brazil; goods that return to the country after being temporarily exported, among others.

How will the taxation of imported purchases work?

The Federal Revenue Service will now require an advance declaration of all international shipments, with information on the buyer, purchase price and description of the content, with the possibility of a fine in case of underbilling or incomplete or incorrect data.

According to the government, the goods would arrive free of charge, without the need for customs clearance, as is currently the case with shipments taxed by sampling, which indicates that the tax should be charged at the time of purchase.

Also according to the Revenue, its inspection will be centered on higher risk shipments, in which the risk management systems, fed by advance declarations, indicate a greater risk of inconsistencies.

Who will pay the tax: sellers or consumers?

Although the first lady, Rosângela da Silva, Janja, stated on a social network that the tax will now be charged to the seller, the main e-commerce platforms for imported products that operate in Brazil are exempt from responsibility for paying taxes. locations.

“With regard to products purchased outside Brazil, you may be subject to the incidence of import taxes. All customs clearance fees are your responsibility and we have no control over these fees,” reads the terms and conditions document for the Shein apparel and accessories marketplace.

“You acknowledge and agree that the timely settlement of all fees, customs charges, tariffs and duties shall be your responsibility, including but not limited to import and distribution taxes, certification fees, postage fees and any shipping charges. customs clearance (if any)”, he continues.

The Shopee platform, which is headquartered in Singapore, informs in its customer service area that “there is the possibility of additional charges for import taxes at customs control” and that “this tax is your sole responsibility and is not refunded by Shopee” . In its terms of service, the site further states that “The price of a product and shipping charges must include the total amount to be charged to the buyer such as sales tax, amount of additional fees, tariffs, etc.”

AliExpress says on a consumer queries page that “the buyer is obliged to do customs clearance” and that, if the package is retained by customs, he must pay the tax for customs clearance.

Other platforms that sell imported products in Brazil, Amazon and Market Livre, usually charge the tax at the time of purchase.

When do the changes take effect?

There is still no date for the end of the exemption, which must be effected through a provisional measure (MP). But as of July 1st, the Federal Revenue already expands inspection over the sector.

According to a normative instruction published in December 2022, on that date, Correios are required to forward to the Tax Authorities, two days before the arrival of all postal shipments in Brazil, a form with 37 information on the buyer, such as CPF, purchase amount and description of the content. Currently, this exchange of information is done by sampling.

Who benefits from this change?

The measure is part of a package announced by the Ministry of Finance to increase the collection of the Union, which should have a deficit of R$ 100 billion in 2023, according to economists’ projections. The portfolio holder, Fernando Haddad, estimates that the end of the exemption for low-value remittances by individuals should guarantee an additional R$8 billion per year.

Brazilian businessmen who control large retail chains also support the measure, considering that importing products without taxation through platforms such as Shein, Shopee, AliExpress and Wish, which they classify as “digital contraband” generates unfair competition.

The government also argues that the consumer would benefit from the changes, as purchases made over the internet would be delivered faster, safer and with better quality. “That’s because the products will have the release process streamlined, based on the information provided by the legal seller, while they are still in transit to the country.”