Lula says import tax exemption will not hurt Brazilian industry - Valor International

President Lula said eliminating Brazil’s import tax on international purchases of up to $50 will not hurt domestic retailers or manufacturers, dismissing business groups’ warnings about the impact of a measure his government is promoting in the final stretch of the election campaign.

Lula on Thursday, Sept. 10, signed into law legislation making the exemption permanent. The measure is one of the government’s main political bets in the final stretch of the election campaign. Lula, who is seeking reelection, worked with Lower House Speaker Hugo Motta and Senate President Davi Alcolumbre to secure congressional approval last week before a provisional executive order providing for the exemption expired on Tuesday, Sept. 8.

The legislation also allows the Finance Ministry to reduce the import tax on goods worth between $50 and $3,000 from 60% to as low as 30%. It also created special tax treatment for patients who need medicines that are unavailable in Brazil. Such products are exempt from import tariffs provided they are finished products, have no equivalent made in Brazil, are classified as medicines by Brazil’s health regulator and are imported by individuals for their own use in treating rare or neglected diseases.

At the signing ceremony at the presidential palace, Lula questioned industry groups' arguments against the exemption for purchases of up to $50.

“I think the argument from business owners who say they will suffer losses is somewhat false,” Lula said. “The amount involved is so insignificant that it makes no sense to say it will cause losses, unemployment or problems for retailers.”

Business groups dispute Lula’s assessment. A study by Prospera Brasil Coalition, which comprises 26 organizations representing industry, retailers and workers, cited official statistics showing declines in retail output of 6.8% and apparel production of 8.2% in July 2026 from a year earlier. The exemption was already in effect under the executive order. “This rewards imports and punishes those who produce and create jobs in Brazil,” the coalition said of the elimination of the tax.

The tax elimination has also coincided with an increase in imported goods entering Brazil this year. In June, imports through a government program that allows participating e-commerce platforms to collect taxes when purchases are made and speeds customs processing reached a record R$2.6 billion, according to a Valor analysis of Federal Revenue Service data. The federal government created the program in 2023.

Finance Minister Dario Durigan, who attended Thursday’s event, said the system has helped bring order to international purchases. “We had no control [over international purchases]. Gun parts were coming in, as were toys that were harmful to children. What we did was organize these shipments,” he said. “Today, all these companies have standardized their packages. Seizures of gun parts and drugs have increased significantly.”

This article was translated from Valor Econômico using an artificial intelligence tool under the supervision of the Valor International editorial team to ensure accuracy, clarity, and adherence to our editorial standards. Read our Editorial Principles.