Brazil to Implement digital tax on e-commerce shipments
Brazil’s Finance Minister announced that the country will implement a ‘digital tax’ on e-commerce shipments. According to Reuters, the tax will exempt consumers from tax collection when they make a purchase, and companies will collect the tax without passing on any additional cost.
Reuters reported that the Brazilian government will implement a digital tax on shipments from e-commerce giants. This is in order to follow the example of developed nations and to close a loophole that Asian e-commerce giants were taking advantage of. The tax in question already exists, and will be collected electronically prior to the shipment of goods. Consumers will be exempt from any tax collection when they make the purchase, while companies will collect it without passing on any additional cost. The move comes after President Luiz Inacio Lula da Silva asked his economic team not to proceed with a previously planned ending to tax exemptions for international orders from individuals.
According to a source at the Finance Ministry, the proposed measure will not involve creating a new tax, but instead adopting an improved collection system. AliExpress and Shopee had agreed with the tax proposal before the government reversed it, while Shein will invest around $150mill in Brazil in the coming years as it intends to partner with 2,000 manufacturers and boost jobs over the next three years.
The Brazilian government’s proposals for this digital tax include implementing the tax on e-commerce shipments and collecting the tax electronically prior to the shipment of goods, while also exempting consumers from any tax collection when they make the purchase.