Key facts
- Brazil's Congress upheld President Luiz Inacio Lula da Silva's executive order to eliminate federal import taxes on purchases up to $50.
- The tax exemption was reinstated in May, reversing a previous levy.
- The policy aims to reduce costs for lower-income Brazilians who widely use cross-border e-commerce platforms.
- Surveys indicated significant public support for restoring the tax exemption.
- International shipments to Brazil surged to a record R$2.6 billion in June after the exemption returned.
Brazil's Congress has voted to uphold an executive order by President Luiz Inacio Lula da Silva that eliminated federal import taxes on purchases valued up to $50. This decision, made ahead of the October presidential election where Lula seeks a fourth term, reverses a previous levy and aims to lower costs for consumers, particularly those from lower-income brackets who frequently use cross-border e-commerce platforms like AliExpress, Shopee, and Shein.
The executive order was issued as a provisional measure, requiring approval from both houses of Congress within 120 days. While government officials had previously supported the tax to protect domestic industry, public opinion surveys indicated strong opposition, with a significant majority favoring the tax exemption. The reinstatement of the zero-duty policy since May has led to a substantial increase in international shipments to Brazil, reaching a record R$2.6 billion in June.
However, the measure has drawn criticism from manufacturing and retail sector organizations, who argue it was politically motivated. Data shows a nearly 70,000 job loss in the retail sector in May, with a significant portion in apparel and footwear. The Federal Revenue agency is monitoring the surge in imports to determine if it represents a lasting trend. International marketplaces contend that the policy democratizes consumption and creates jobs.