Brazil plans to crack down on Asian e-commerce giants and curbs on some company tax benefits, as part of a broader tax reform, Finance Minister Fernando Haddad said on Monday, April 3.
The e-commerce measures come in response to complaints from local retailers about unfair competition from Asian giants such as AliExpress, Shein, and Shopee.
In an interview with local broadcaster GloboNews, Haddad said companies that operate in Brazil are facing unfair competition from "one or two global players" that hide their electronic commerce as person-to-person remittances to avoid paying taxes.
Combating the practice, which Haddad called "smuggling", should generate around 8 billion reais ($1,5 billion) in new revenue for the government.
Brazilian retailers have long been concerned about the local presence of these companies, as they are flooded with Chinese sellers who sell low-priced and competitive goods to Brazilian consumers.
In 2022, the Retail Development Association (IDV), which represents 75 local retailers, has organized a campaign that could result in a series of actions against online marketplaces that, in their opinion, sell counterfeit products or are not properly taxed.
IDV's document calculates between 19 and 20 billion reais in tax evasion on sales by international retailers in 2020 - 80% to 90% of which come from Asia. Among Brazilian chains, this tax evasion is between 4 billion reais and 5 billion reais.
According to Reuters, the government plans to release the measure by next week, together with legislation for its fiscal framework.
According to data intelligence firm AgenciaePlus, the five most visited online stores in Brazil, the largest economy in Latin America and the fifth largest country in terms of population, in 2022 are Mercado Livre, Shopee, Amazon, Americanas and Magalu.
