Brazil Eliminates Import Tax on Small International Purchases

President Luiz Inácio Lula da Silva is sanctioning a measure that eliminates the 20 percent import tax on international purchases of up to 50 US dollars. The move follows an agreement between the president and the leaders of the Chamber of Deputies and the Senate. This change directly benefits international platforms such as Shein, Shopee, and AliExpress. While the federal import tax is removed, the state level ICMS tax remains in effect. For example, a 50 US dollar purchase could drop from approximately 374 Brazilian reais to 312 Brazilian reais. To mitigate potential damage to domestic sectors such as textiles, footwear, and cosmetics, the Ministry of Finance will conduct economic impact evaluations every three to six months. The Congress will also reevaluate the measure annually. A center left source reports that the president planned a signing ceremony at the Palácio do Planalto. Conversely, a center right source claims the president opted against a ceremony to minimize media exposure regarding a domestic bank scandal involving his allies. Regarding the motivation for the policy, the center right source notes that the tax was unpopular ahead of elections and that the president framed the decision as a matter of social justice for lower income citizens.