The Federal Revenue Service is working on drafting a provisional measure (MP) to combat the so-called “virtual camelodrome”, said the municipality's secretary, Julio Cesar Vieira Gomes, yesterday. As Valor anticipated in February, this movement reflects an action led by large Brazilian retailers and industries, together with government bodies, to close the siege on foreign platforms that would be importing counterfeit goods, or without paying due taxes.
These online operations, called “virtual camelodrome” by the market, would be sending products from abroad to Brazil, circumventing tax legislation in two ways. In the first of them, retailers hosted on these platforms would classify themselves as natural persons. Thus, they would take advantage of a rule that allows items costing up to US$ 50 (around R$ 250) to not pay taxes to enter the country, as long as they are also addressed to individuals.
In the second, these companies would underreport the value of these goods, if they cost more than US$ 50, precisely to avoid paying the due taxes. This leads consumers and retailers to import dozens of products in “chopped” purchases, up to this dollar limit, and resell them in the country. The activity grew strongly with the crisis following the pandemic, due to low prices, the offer of free shipping through websites and “apps” and promises of fast shipping.
Gomes' statement was made at an event held yesterday by the Parliamentary Front for Competitive Brazil, in Brasília. In a video broadcast at the meeting, Multilaser's CEO, Alexandre Ostrowiecki, said that the topic has already been taken by business entities to the Ministries of Justice and Economy and the Attorney General's Office. Among the entities are Abinee, from the electrical and electronic sector, Eletros, from manufacturers of electronic products, Abrinq, from the toy industry, and the Institute for Retail Development (IDV), the largest entity in the sector, with 70 associated networks.
In the calculations presented by Ostrowiecki, a speaker produced in Brazil costs R$ 231, with the consequent incidence of all taxes, and the same speaker costs R$ 100 if sent to the country by one of these large platforms. Ostrowiecki also stated that, according to the Revenue itself, more than 700 thousand of these orders arrive in the country per day, with a tax loss of around R$ 80 billion per year.
“No one is talking about protecting national companies, but simply about having the same rules for everyone,” he said. According to him, it is the “large Asian platforms” that take advantage of “loopholes” in the law.
Sources claim that the focus of the offensive are groups such as AliExpress, from the Chinese Alibaba, Shopee, from Sea Limited, from Singapore, the American companies Wish and Shein, Mercado Livre, based in Argentina, and OLX Brasil, with 50% of the business in its hands from South Africa's Naspers. These businesses have been growing rapidly, especially after the 2015 crisis, increasing market share gains over traditional networks, which has been bothering companies.
A Goldman Sachs report published yesterday reports that Shopee would already have 5% of market share in Brazil in two years of operation, and this share may have reached high single digits by the end of 2021 (range of 9%).
The possibility of an MP moving forward is the first clearest sign of the increasing offensive by local retailers and manufacturers on informal businesses in the country and foreign platforms. These platforms are accused of hosting retailers who do not issue invoices and have flawed control systems to prevent irregularities. This is one of the central points of criticism from retailers. Brazilian chains also operate “marketplaces” that sell imported items, but have been telling government interlocutors that they have more solid control systems.
Valor found that, in recent weeks, IDV representatives met with politicians, members of the Federal Revenue, Federal Police, MJ bodies and the PGR. There are studies forwarded with suggestions for actions, such as holding carriers criminally liable for the entry of illegal imports, and requiring invoices for items dispatched by the Post Office. Another suggestion would involve reviewing the US$ 50 import limit law.
Foreign platforms have been putting together their defense strategies, according to sources. Valor found that Mercado Livre has made itself available to the sector and government bodies to collaborate. It also tries to reinforce the perception that it is not part of the group of platforms targeted by the MP, as it has improved internal controls.
By Estevão Taiar and Adriana Mattos — From Brasília and São Paulo 24/03/2022
Source: Valor Econômico