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Brazil Considering Lower Duties for IT Products

President Bolsonaro tweeted on 16 June that Brazil’s Ministry of Economy was assessing the possibility of reducing the current import duties on information technology products from 16 percent to four percent. Reportedly, this duty reduction would cover such products as cellular phones and computers. Special Secretary for Foreign Trade and International Relations Marcos Troyjo had raised that possibility on 12 June, claiming that such a reduction would act as an exponentially positive shock to Brazilian companies. Troyjo added that the government is looking to enhance the competitiveness and productivity of companies that use IT equipment.

Reactions to this proposal from the Brazilian private sector have been mixed. The Brazilian Electrical and Electronic Industry Association (ABINEE) stated on 17 June that the potential duty cuts “would make it unfeasible to continue business activity, eliminating a significant amount of jobs.” The Association of Brazilian Information Technology Companies (ASSESPRO) asserted that the proposed measure would boost overall competitiveness despite some adverse effects to certain sectors. ASSESPRO also stressed the importance of raising Brazil’s precarious competitiveness in the global stage.

The Brazilian Semiconductor Industry Association, meanwhile, said that such a proposal could lead to the departure of foreign companies currently located in Brazil, a reduction of the Brazilian industrial sector, and an increase in imports that could dismantle the domestic components manufacturing sector, including domestic semiconductor manufacturing.

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