Brazil's Congress Approves End of Import Tax on Low Value International Purchases

The Brazilian Congress approved a provisional measure on Thursday that eliminates the 20 percent import tax on international purchases of up to 50 US dollars. The measure, which affects platforms such as Shein, Shopee, and AliExpress, was passed through symbolic votes in both the Chamber of Deputies and the Senate. The text now proceeds to President Luiz Inácio Lula da Silva for sanction. While the federal import tax is removed, the state level ICMS tax remains in effect. For purchases exceeding 50 US dollars, a taxation rate of up to 60 percent remains, though it includes a fixed discount of 20 US dollars.

The approved text includes provisions for the Ministry of Finance to establish different rates based on transport methods and platform compliance with Federal Revenue programs. It also allows the government to limit the frequency of reduced rates for individuals to prevent the artificial splitting of shipments. Additionally, the measure provides tax exemptions for medications without national equivalents used to treat rare or neglected diseases and introduces rules for combating fraud and illegal products.

Center right sources frame the move as a popular measure with strong appeal to low income families and a strategic priority for President Lula's re-election campaign. They note that the approval followed agreements between the legislative and executive branches, though some opposition members criticized the speed of the voting process. Center sources frame the decision as a populist move and an economic setback. They highlight warnings from industry and retail associations, such as the CNI and Abit, which argue that the tax exemption creates unfair competition and threatens thousands of domestic jobs. Conversely, technology and mobility associations welcomed the move as a way to protect the purchasing power of consumers.