Latin American Cross-Border E-commerce Gets a Boost! Brazil Scraps Import Tax on Small Parcels Under $50

[Ebrun Exclusive] Brazilian President Luiz Inácio Lula da Silva has recently signed an executive order, eliminating the 20% federal import tax on small parcels valued under $50. The tax rate for goods valued over $50 but not exceeding $3,000 has been reduced from 60% to 30%. This means Brazilian consumers purchasing goods under $50 on cross-border e-commerce platforms will only need to pay approximately 17% state circulation tax (ICMS).

Rogério Ceron, the Executive Secretary of Brazil's Ministry of Finance, stated that this tax reduction will benefit "lower-income groups that are highly dependent on cross-border e-commerce platforms to purchase their daily essential products."

On June 27, 2024, President Lula signed a decree formally imposing a 20% federal import tax on cross-border e-commerce parcels valued under $50, which took effect on August 1 of that year. Previously, Brazil's domestic industrial and commercial sectors had jointly pressured the government, claiming that cross-border e-commerce constituted unfair competition. They argued that over 500,000 foreign parcels were flooding into the domestic market daily with almost no taxation, severely impacting manufacturing sectors like textiles and apparel. The criticism was primarily directed at the influx of cheap clothing small parcels on platforms like SHEIN and AliExpress. In Brazilian Portuguese slang, these items are referred to as "blusinha" (little shirt), giving the tax its nickname, the "shirt tax."

In less than two years, on May 12, 2026, Lula signed another executive order announcing the removal of this import tax. From a fiscal perspective, eliminating the import tax means losing a significant revenue source. Data shows that from January to April 2026 alone, the government collected 1.78 billion Brazilian reais in taxes from international orders, a 25% year-on-year increase. However, Brazil will hold a presidential election this October. The new policy, benefiting lower-income groups, could help Lula garner public support for his re-election bid.

Furthermore, the removal of the federal import tax will directly benefit cross-border e-commerce platforms represented by AliExpress, SHEIN, and Shopee. These platforms typically enter the Brazilian market using a "direct small parcel shipping" model, and reduced tax burdens will significantly enhance their price competitiveness.

In fact, the previously high tariffs in Brazil had already forced platforms to accelerate their localization strategies. For instance, SHEIN began considering a "local apparel production plan in Brazil" as early as the end of 2021, pioneering an open platform model in Brazil to attract "local-to-local" merchants. Shopee has also been actively recruiting local Brazilian sellers. According to Felipe Piringer's statistics, as of April 2022, Shopee's Brazilian marketplace had approximately 2 million local seller stores, doubling in less than a year. AliExpress, meanwhile, attempted to attract local merchants with low commission rates, maintaining commissions at 5%-8% for its Brazilian site, significantly lower than local platforms.

Ebrun will continue to track and report on this development. To learn more information related to this article, please scan the QR code to follow the author's WeChat.