Brazil senator drops proposal to tax low-cost online orders from bill

By Thomson Reuters Jun 4, 2024 | 2:11 PM

BRASILIA (Reuters) – A proposal to tax online international purchases under $50 was dropped from a wider bill ahead of an expected vote in the Brazilian Senate on Tuesday and should be debated separately, the senator in charge of the bill said.

The unpopular 20% import tax on international low-cost online purchases was removed from a bill on sustainability tax incentives for automakers that was approved last week by the country’s lower house.

The Senator in charge of the bill, Rodrigo Cunha, argued that it is “not the ideal moment” to vote on the measure, and called for lawmakers to vote on it separately.

President Luiz Inacio Lula da Silva’s government has sought to balance public spending with more tax revenue, although he previously expressed opposition to the import tax proposal. Last year, Lula’s administration tried to implement a version of the online sales tax, which is supported by local retailers amid growing presence of Asian e-commerce giants in Brazil, but at the time he gave up after strong backlash.

The proposal, which is facing intense consumer backlash, affects global online retailers such as Alibaba’s AliExpress, Sea’s Shopee and fashion retailer Shein, which have gained a huge presence in the Brazilian market in the last few years.

(Reporting by Maria Carolina Marcello and Luana Maria Benedito; Editing by Rod Nickel)