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Government Announced Tax Exemption for Imported Foods, But There Is a Detail: Most Were No Longer Paying Taxes! Experts Warn That the Measure Is Ineffective and Without Real Impact on Prices.
In an attempt to curb rising food prices and relieve the financial burden on Brazilians, the federal government announced the reduction of import taxes on nine essential items.
However, industry experts assess that the measure may have a near-zero effect for the consumer, as many of these products already had zero rates due to trade agreements, especially with Mercosur countries.
The decision was announced on March 6 by the Vice President and Minister of Development, Industry, Commerce and Services, Geraldo Alckmin (PSB).
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The stated intention is to reduce the cost of essential items and minimize the impacts of inflation, which in 2024 closed at 7.69% for food, a rate significantly higher than the 4.83% overall inflation measured by the IPCA.
However, food sector entities point out that the strategy may not have an effect on the domestic market.
Why Might the Measure Be Ineffective?
According to the Federation of Hotels, Restaurants and Bars of the State of São Paulo (Fhoresp), the reduction of import tax is “ineffective” because most of the benefited products already have zero tariffs when imported from Mercosur countries.
This economic bloc, composed of Brazil, Argentina, Paraguay, and Uruguay, establishes a series of agreements that allow the free circulation of goods without customs tariffs.
According to Edson Pinto, executive director of Fhoresp, the government should focus on more effective measures, such as reducing the ICMS (Tax on Circulation of Goods and Services) and combating high fees on meal vouchers.
“This, yes, would have a direct impact on the tax burden, reflecting on meals outside the home and supermarket prices,” he states.
Factors That Drove Up Food Prices
Inflation in food has several determining factors, including climatic issues.
Brazil faced in 2024 one of the largest droughts in history, which severely affected the production of corn, coffee, and other essential products.
The low supply of these inputs raised prices, impacting the entire production chain.
Another factor that explains the price increase is the meat market.
Data from the Center for Advanced Studies in Applied Economics (CEPEA) shows that, in 2022, the price of the live fat cattle was R$ 343, while currently it is around R$ 310.
However, the reduction of the herd due to excessive culling of females in 2024, caused by low prices at that time, led to a lower supply of cattle, putting pressure on values in 2025.
Sylvio Lazzarini, director of Institutional Relations at Fhoresp, advocates that the government should implement measures that value Brazilian producers instead of trying to control prices through imports.
“Without incentives for national production, we will continue to face rising prices and dependence on external markets,” he warns.
Which Foods Are Included in the Exemption?
The nine items covered by the measure are: olive oil, corn, sunflower oil, sardines, biscuits, pasta, coffee, meat, and sugar.
The government’s idea is to lower the prices of these products to ease the cost of living for the population, but, as pointed out by specialists, the impact may be minimal.
The Political Impact of the Decision
Experts’ analysis also points out that the government’s decision may have a political bias and not necessarily an economic one.
The administration of President Luiz Inácio Lula da Silva (PT) is facing a drop in popularity, and measures like this may be an attempt to reverse that trend.
Historically, the price of food is one of the factors that most influences public perception of the government.
If prices continue to rise, political pressure on the Palácio do Planalto is likely to increase, especially in a context of high inflation and economic difficulties faced by the population.
Alternative Solutions to Curb Food Inflation
Economists and representatives from the productive sector suggest that the government could adopt more effective measures to control food prices, such as:
- Tax incentives for domestic production, reducing costs for producers;
- Reduction of ICMS on food, which would have a direct impact on final prices for consumers;
- Reduction of fees on meal vouchers, making meals outside the home more accessible;
- Investments in agricultural infrastructure, to minimize climatic impacts and increase production predictability.
With these points in mind, it is clear that the simple reduction of import taxes is not enough to curb food inflation.
The government’s challenge is to implement structural solutions that truly benefit consumers in the long term.
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