Brazil targets Asian e-commerce giants, local companies in tax push
- Haddad said firms in Brazil face unfair competition from some players that hide their e-commerce as person-to-person remittances to avoid taxes
- The government will seek approval from the Supreme Court to disallow companies from receiving tax breaks from states on operating expenses
Brazil will soon unveil tax measures, including a crackdown targeting Asian e-commerce giants and curbs on some company tax benefits, as it looks to raise more than 100 billion reais (US$20 billion), Finance Minister Fernando Haddad said on Monday.
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.
He later told journalists that combating the practice, which Haddad called “smuggling”, should generate 7 billion reais to 8 billion reais in new revenue for the government.
AliExpress, owned by Alibaba Group, Shopee, owned by Sea Ltd, and Shein did not immediately respond to a request for comment. Alibaba owns the South China Morning Post.
The government plans to release the measure by next week, together with legislation for its fiscal framework, which sets out limits on spending so President Luiz Inacio Lula da Silva’s new administration eliminates the budget deficit next year.
According to Haddad, the framework, which also depends on booming revenue, will be supported by two other measures that the government intends to submit in the next few days.