Brazil eases tax burden on cross-border e-commerce ahead of elections

Brazil's president, Luiz Inácio Lula da Silva, repealed a tax on Tuesday on purchases under 50 dollars made through e-commerce platforms such as China's Shein or Temu, a move aimed at consumers just months before seeking re-election.

In 2024, Lula had decreed a 20 percent surcharge, known as the "taxa das blusinhas" (blouse tax), on these transactions.

The right-wing opposition used this as ammunition and accused the government of raising revenue at the expense of lower-income groups.

Accompanied by several ministers, Lula repealed the tax in an official ceremony.

"What you are doing is removing federal taxes from popular consumption, from the consumption of the poorest people," said the minister of planning and budget, Bruno Moretti, during the event.

The tax was initially created as a temporary measure and was made permanent by a Senate vote a couple of months later.

Unpopular with consumers, the tax was supported by Brazilian industry, particularly the apparel sector, which claimed unfair competition from cheap products imported via international platforms.

According to the government, the surcharge was effective in combating smuggling. "We have practically eliminated it, we have managed to combat smuggling (...), so we can take a step forward" and repeal the tax, stated the treasury secretary, Rogério Ceron.

The announcement comes less than five months before the elections in which Lula, 80, will seek a fourth term. He is set to face senator Flávio Bolsonaro, 45, son of former president Jair Bolsonaro, who is under house arrest for attempting a coup.

Both are tied in the latest voting intention polls.

This article was translated to English using an AI tool.

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