Consumers are SHOCKED: Taxation makes tax more expensive than the product

In an attempt to protect and favor the national market, the Brazilian government and the National Congress are looking at ways to create a tax on virtual trade of imported goods, such as the Chinese e-commerce Shein.

However, this taxation tends to weigh heavily on the consumer’s pocket, who may end up paying twice the purchase price just for the amount of taxes on the merchandise.

For purchases up to US$500, the import tax percentage is 60%, which is called the customs value. This value consists of the sum of the purchase value, shipping fee and insurance. Let’s look at the example in reais below.

How does virtual commerce taxation work?

To give you an idea of ​​how e-commerce taxation affects your online purchase, let’s consider a hypothetical scenario. For example, your Shein cart is ready with a purchase of R$187.75. On this, R$225.29 in taxes were charged. In order to collect the package, this amount must be paid to the Post Office and the Federal Revenue Service.

However, R$225.29 is only 60% of the customs value, which is R$375.49, with R$187.75 for the products and R$187.74 for shipping. In the end, the tax amount was more expensive than the total value of the products you want to buy.

National trade vs. international virtual trade

Customs inspections becoming more stringent may be the result of domestic retailers competing with online retailers selling imported products.

The popularization of companies like Shein and Shoppe during the pandemic, both due to their well-structured e-commerce and affordable prices, made competition with national sellers unfair.

Taxing virtual commerce is a way of encouraging consumers to buy from national companies and brands, which would have a more favorable competitive market value in this scenario.