Brazil's Congress Eliminates Federal Import Tax on $50 E-Commerce Orders

Brazil's Congress has permanently removed the 20% federal import tax, known as the Imposto de Importação, on international e-commerce purchases valued at up to $50, sending the measure to President Luiz Inácio Lula da Silva for final sanction. The Chamber of Deputies and the Senate approved the Provisional Measure, MP 1.357/2026, on September 3, a decision that secures lower prices for Brazilian consumers, particularly those who shop on foreign platforms like Shein, Shopee, and AliExpress.

The measure centers on the highly visible issue known popularly as the “taxa das blusinhas,” or “little blouse tax,” which refers to the duty on small, low-cost goods. While the tax was initially put in place to level the playing field for domestic retailers, it proved to be highly unpopular with the public. The zeroing of the federal tax reverses a policy aimed at protecting national production from cheaper foreign competition.

For the international consumer who buys from cross-border platforms, the tax reversal means significant savings; a $50 purchase, for example, previously carried a $10 federal import tax. However, the purchase is not entirely tax-free, as it remains subject to the state-level ICMS, a value-added tax (VAT) that varies by state. The approved text also grants the Executive Branch the authority to establish limits on the frequency and quantity of tax-exempt purchases to prevent large commercial orders from being fraudulently split into multiple small shipments.

The National Confederation of Industry (CNI), Brazil's leading industrial lobby, has been a fierce critic of the zero-tax policy, warning of significant domestic economic impact. The CNI estimates that the measure could result in a loss of up to 109,000 jobs and a reduction of R$21.8 billion (approximately $4.25 billion) in domestic production, a direct consequence of intensified foreign competition.

The measure now rests with President Lula, who has indicated support for the popular policy. Should he sanction the text, which is widely expected, the zero import tax rate will become permanent law. The next step is a final decision from the Executive Branch before the rules formally take effect.

What it touches

The elimination of the federal import tax is expected to increase competitive pressure on publicly traded Brazilian retail and e-commerce companies that rely on domestic sales. Local retailers, which already bear high production and tax costs, will face greater difficulty competing with the lower-priced imported goods sold by Chinese-based marketplaces.