E-commerce: competition with international retailers is unfair, says expert

“We understand that competition is positive, but equal conditions must be given to those who are competing in the market, because otherwise it will be in a bad condition of inequality and it ends up that the Brazilian retailer is harmed, because it is the one that is generating jobs and income for the country and is being taxed and what comes from abroad is not being taxed”, he says.

Merula claims that, while Brazilian companies are subjected to a high tax burden, a situation that, in itself, makes it difficult to compete with what is imported, there is the additional problem of part of the competitors being “disloyal”. According to her, companies pretending to be individuals when selling products to Brazilians and, therefore, end up exempt from import tax, lowering the price of orders.

She points out that, although the taxation of imports displeases consumers, something has to be done to protect national retail companies. “What we think of improvement for the consumer is really working on a tax reform, having a more simplified calculation issue, because the complexity of the system is very large. This costs the consumer as well”, she argues.

Deputy Julio Lopes (PP-RJ) claims that international retailers are circumventing legislation to avoid paying taxes and that they will work to end what he calls “invasion of the national market”.

“It’s good for you Brazilians to know that over there in China they already give subsidies for these companies to compete with us. There, employment does not have the cost that it does in Brazil. Chinese citizens do not have the labor rights that Brazilians have and, therefore, this product it would arrive cheaper in Brazil even paying taxes. Without taxes it is unfair and unacceptable competition, against which we are here to fight.”

Dispute

International e-commerce platforms such as Asian ones AliExpress, Shopee e Shein, gained ground among Brazilian consumers in recent years, mainly due to lower prices. But, for representatives of the national productive sector, part of this dispute did not take place within the rules.

The legislation guarantees that Brazilian consumers are exempt from import tax – whose percentage is 60% – when making international purchases of up to US$ 50 (approximately R$ 250), provided that the sender is also an individual. This means that all orders whose origin or destination is a legal entity (company) are subject to taxation.

As a measure to resolve the impasse and also increase revenue, President Lula’s government even announced the end of the import tax exemption for purchases by individuals, but withdrew in the face of negative repercussions.

Tax reform may reduce impacts of illegal e-commerce, assesses expert

Retail grew 1.4% per year, on average, between 2001 and 2022