Retail asks Haddad to review the federal exemption for imports of up to $50

The Institute for Retail Development (IDV) has handed over a study to the Ministry of Finance to be asked by the Minister Fernando Haddad reviews the federal tax credit For imports less than 50 USD.

According to the head of IDV, Jorge Golçalves Filho, international transfers of this type from January to May this year totaled about R$20.8 billion. The study shows that this represents a loss of federal revenue in the order of R$12.5 billion.

Another concern related to IDV is also related to the potential mass dismissal of retail employees, as national companies will have to compete with Chinese e-commerce companies.

We have a closely related issue of imports up to 50 USD, which is 250 R$. Looking at retail, it’s a pretty high mid-ticket. We’ve seen this in the apparel sector, which is seeing store closures and unemployment. Retail has 19 million official jobs. We estimate that 10% of jobs could be lost.

Gonçalves also indicated to Poder 360 that although the measure appears to be very beneficial to the consumer, job losses would be terrible for the country.

As more products come in, without paying taxes, it will become practically unsustainable. Without taxes, you can’t support it. We have studies that show the effects across all sectors.

IDV predicts that many Chinese retailers may also end up subsidizing the prices of some products, which would make the exemption even more harmful for local retailers.

Anything less than R$250, which may come with a subsidized or fractional rate, will cause massive damage to the population of Brazil. We risk seeing strong unemployment in retail, which was already experiencing.

Finally, Gonsalves says the exemption measure for purchases of up to $50 will create jobs abroad. For the time being, the Ministry of Finance has not commented on the data provided by IDV.

However, the Conforming Shipping Program should start operating in August, and this has even Brazilian retailers looking at ways to participate in the initiative.