Brazilian Minister Paulo Guedes may Cancel Tax on Imported Electronics
RIO DE JANEIRO, BRAZIL – The Minister of Economy Paulo Guedes may endorse Camex (Chamber of Foreign Trade) and submit a resolution providing for zero rates on the importation of computer and telecommunication goods. This means that importing a phone or notebook may soon become cheaper.
The measure is part of the trade opening promised by Minister Paulo Guedes while campaigning alongside current president Jair Bolsonaro, according to Folha de S.Paulo. Should it be implemented, it will be the first measure of its kind.
According to Folha, people engaged in discussions on the zero tax say that the resolution has not yet come into force because Paulo Guedes is still waiting for approval of the Social Welfare reform. On the other hand, there is still the potential for a setback: July 1st, there was a congressional vote commanded by the benches that defend the local industry.
What Camex approved: to change the current ex-tariff system with a model that temporarily eliminates import tariffs for machinery, equipment, and technology inputs without any similar in local industry. This means that imported electronics with no equivalents in the domestic sector will no longer be taxed.
The national business community was concerned by the news, while Guedes argued that throwing the domestic industry into the “lions’ den” would “awaken their survival instincts.” The goal would be to push for competition and an increase in local business productivity.
Currently, imports of capital goods are taxed at fourteen percent, and sixteen percent for IT and telecommunication goods. In a previous announcement, Guedes’ team intended to lower the rates to 4 percent by the last year of Bolsonaro’s term.
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