Lula Government Axes ‘Blusinhas Tax’ on US$50 Foreign E-Commerce, Reviving Political Debate

The government of President Luiz Inácio Lula da Silva moved to eliminate the 20% federal import tax on low-value international e-commerce purchases, a measure seen as a significant political appeal to Brazilian consumers ahead of local elections. The policy change, enacted by Provisional Measure (MP 1357/2026) in May 2026, immediately zeroed the federal import levy on goods valued up to US$50, effectively ending the controversial tariff widely known as the 'blusinhas tax'—a nickname referencing the popular purchase of inexpensive clothing items from global platforms.

The tax reversal is a sharp pivot from the government's stance two years earlier. The 20% federal tax was initially approved in August 2024 following intense lobbying from the domestic retail sector, which argued that tax-free foreign shipments created an unfair competitive advantage for foreign giants like Shein, Shopee, and AliExpress over Brazilian companies. The measure, however, proved deeply unpopular with consumers, leading to pressure on the political wing of the Brazil government to find a reversal ahead of an election cycle. While the elimination of the federal tax has strong popular support, with one recent poll showing 73% approval, it drew immediate protest from industry associations that fought to maintain the tariff.

The mechanism for the tax cut applies only to purchases made through the Remessa Conforme program, a compliance scheme created by the Brazilian Federal Revenue Service to regularize and accelerate the flow of international mail. It is critical for consumers to note that while the federal portion of the tax is now zeroed, the state-level value-added tax, or ICMS, remains in effect on these purchases, typically adding another 17% to 20% to the final cost, depending on the state of destination.

Despite taking effect immediately upon its publication, the Provisional Measure is not permanent. Like all MPs, it must be approved by the National Congress within 60 days, renewable for another 60, to be converted into permanent law. However, as of July 2026, the legislative analysis of MP 1357/2026 remained stalled in Congress, with the crucial joint committee required to review the text yet to be installed. The measure's final fate now rests with the leaders of the Chamber of Deputies and the Senate, who must manage the competing political and economic pressures from consumers who favor the lower prices and the domestic industry which is calling for the tax to be reinstated.

What it touches: The most immediate impact is on publicly traded Brazilian retail companies and e-commerce firms that compete directly with international platforms for low-value goods. The zeroing of the 20% federal import tax is expected to increase the price competition for these domestic retailers as the cost advantage for foreign competitors returns.