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The new ICMS tax rate on international orders under US$50 will increase from 17% to 20%, impacting millions of Brazilians. Purchases of R$100 with this tax could cost up to R$150, putting even more pressure on classes C, D and E.
Recently, a new decision on the increase in ICMS (Tax on Goods and Services) on international purchases caused quite a stir among consumers and companies. Starting in April 2025, the tax on orders under $50 will increase from 17% to 20%. Doesn't that seem like a small amount? For those who regularly buy imported products, the impact will be direct in their pockets.
Big names in e-commerce, such as Shein, AliExpress and Amazon, are already preparing to face this scenario. But Will consumers be able to absorb this increase??
Why was the tax increase implemented?
Brazilian states are facing a major financial challenge and have seen an increase in ICMS as a solution to increase revenue. States such as São Paulo, Paraná and Minas Gerais have led this proposal, which seeks to strengthen public coffers and cover fiscal deficits.
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With the rising costs of healthcare, education and public safety, state governments have seen ICMS as a quick way to increase revenue. After all, the tax is one of the main sources of income for states.
Another issue is pressure from the domestic market. Brazilian businesspeople have long complained about unfair competition from imported products, which arrive in the country at prices well below those charged here. For them, the measure levels the playing field, but many argue that it could be even stricter.
How does this affect the end consumer?
Consumers, especially those with lower purchasing power, will be the most affected. The “blouse tax” promises to tighten the budgets of those who already depend on low prices to buy.
Imagine buying a product worth R$100 abroad. Currently, you pay around R$144,50 in taxes and fees. With the new ICMS, the amount will increase to R$150. This difference, even though it may seem small, weighs on the budget of those who buy regularly.
Consumers from the lower social classes, who represent the majority of platform customers like Shein and AliExpress, will have more limited access to imported products. The price increase reduces purchasing power and may force changes in consumer habits.
Reaction of companies in the sector
Large e-commerce platforms are already feeling the impact of the change. The tax increase raises concerns not only for consumers, but also for businesses, which could lose a significant portion of their sales.
International companies argue that the price hikes will hurt lower-income consumers who rely on affordable products the most. There is a risk of falling sales as many shoppers may opt for domestic products or forgo purchases altogether.
Meanwhile, stores like Renner and C&A are beginning to see new opportunities. With the rise in the price of imported products, consumers may migrate to the domestic market, strengthening national retail.
Opportunities for the national market
While on the one hand the increase in ICMS brings challenges for consumers, on the other hand it opens doors for Brazilian brands to grow and reach new audiences.
Local companies can benefit, but they need to invest in quality, competitive prices and good service. This is the chance to strengthen the “Made in Brazil” brand and build customer loyalty among those who previously opted for imported products.
With higher prices on the international market, domestic companies have a golden opportunity to expand their market share. Promotions, effective marketing strategies and innovation are essential to attract consumers.
The increase in ICMS in international shopping is a measure that divides opinions. While states seek to balance their finances, consumers feel the weight in their pockets, especially those who depend on low prices to consume.
How can these **** people believe that by reducing international purchases the people will direct their purchases to the domestic market? Only in the tax-collection heads of these ****.