The federal government, in a streak of bad luck with its tax policies, is facing a perfect storm (as economists like to say). The Minister of Finance has become the target of memes and intense criticism due to his obsession with increasing taxes and revenue at all costs, ironically being nicknamed Fernando “Tax”.
The perception of the population, especially the poorest classes, is likely to worsen with the new tax on imported products of up to US$ 50, which will come into effect next month. Even before August begins, platforms like AliExpress and Shopee advanced the collection of the tax, popularly known as the “blouse tax,” to July 27. Initially, this collection was scheduled for August 1st, as stipulated by the Ministry of Economy. The new tax will apply to international purchases of up to US$ 50, with a 20% rate.
The platforms justify the advance as a measure to adapt to the new tax system, due to the time needed to adjust import declarations. This advance causes a mismatch between the time of purchase and the declaration to Customs.
The new 20% tax on international purchases of up to US$ 50 results in a total tax burden of 44.5%, considering the current ICMS of 17% plus the import tax (20%). This seemingly distorted calculation, where 20% + 17% result in 44.5%, is a consequence of the Brazilian fiscal strategy known as the “tax-inclusive duty,” aimed at increasing the effective rate.
With the implementation of the new tax, the price of international purchases will increase significantly. For example, a $30 blouse, which currently is only taxed with 17% ICMS, will have its price increased to $36.15. With the new import tax, the blouse’s price will rise to $43.38. Considering a dollar at R$ 5.60, the prices in reais would be R$ 168.00 without taxes, R$ 202.45 with ICMS, and R$ 242.93 with ICMS and the new federal tax. Taxes add almost R$ 75.00 to the price of a $30 product, a value that can significantly impact the budget of poorer families and their previously “affordable” purchases.
It is regrettable that the government chooses to impose yet another penalty, especially at a time of economic crisis when the lower classes are already struggling with the rising cost of living. The “blouse tax” is another example of how policymakers are out of touch with the reality of the population. Instead of seeking solutions that encourage economic growth and job creation, they prefer to indiscriminately increase taxes, harming the most vulnerable.
Brazil urgently needs a fair tax reform that relieves the burden on the poorest and encourages production and consumption. However, the current government seems more concerned with filling public coffers at the expense of the worker. It is time to rethink these policies and seek alternatives that truly benefit the population, not just the interests of a few.
