Lula's Controversial Taxation: $50 Limit on International Purchases

Brazilian President Luiz Inacio Lula da Silva signed into law a 20% tax on international purchases of up to $50. Initially critical of the measure, Lula approved the tax after requests from Brazilian retailers facing unfair competition, especially from Chinese e-commerce. The tax is part of the Green Mobility and Innovation program.

Brazilian President Luiz Inacio Lula da Silva on Thursday signed into law a 20% tax on international purchases of up to $50, despite having previously criticized the measure. Lula signed the bill into law during a meeting of his Council for Sustainable Economic and Social Development in Brasilia.

The tax on online international low cost purchases was a request from Brazilian retailers who argue that they are being victims of unfair competition, mainly against Chinese e-commerce giants. In May, Lula had said he was willing to negotiate with lawmakers about taxing cross-border low cost purchases of up to 50 dollars, but he did not rule out the possibility of vetoing the measure. At the time, the president pointed out that the measure could impact people with lower income.

The highly controversial tax was attached to a bill that creates the so-called Green Mobility and Innovation program (Mover).

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