BRASILIA, May 12 (Reuters) – Brazil’s President Luiz Inacio Lula da Silva on Tuesday signed an executive order to eliminate federal taxes on foreign purchases worth up to $50, reversing course on a highly unpopular levy as he gears up to seek re-election in October.
The move is expected to lower the cost of goods bought on cross-border e-commerce platforms widely used by lower-income Brazilians.
“This will benefit the poorer, lower-income population that relies heavily on these (e-commerce) platforms to buy products that are very important for their daily lives,” said the executive secretary of the Finance Ministry, Rogerio Ceron.
Ceron did not specify the size of the tax revenue loss from the move, which the government said would be published on the official gazette later on Tuesday.
The measures build on a string of recent initiatives by Lula, including a government-backed consumer debt renegotiation program, as he looks to shore up support with voters. Opinion polls show him tied in a runoff against his main rival, Senator Flavio Bolsonaro, the son of former President Jair Bolsonaro, whom Lula narrowly defeated in 2022.
The announcement was made during a hastily arranged live broadcast attended by Lula and several officials, including Vice President Geraldo Alckmin, who had previously said that the tax helped boost the competitiveness of Brazilian industry and create jobs in the country.
When it introduced the measure, the government argued that foreign platforms such as Alibaba Group’s AliExpress, Sea Ltd-owned Shopee and Shein were selling products without facing the same tax burden as companies operating in Latin America’s largest economy, creating what it described as unfair competition.
The reversal came on the same day the government also backtracked on a rule tightening access to subsidized public loans for producers with deforested land – a measure that had taken effect last month and faced strong opposition from the powerful farm sector.
(Reporting by Marcela Ayres and Fernando Cardoso; Editing by Nia Williams and Sanjeev Miglani)
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