A bill focusing on making vehicles in Brazil greener now also includes a “blouse tax” of 20% on international purchases of up to 50 dollars meant to help Brazilian companies compete against cheaper imported goods.
In a contentious move that has sparked widespread debate, the Chamber of Deputies approved on June 11 a new tax on international purchases worth up to 50 U.S. dollars, colloquially known as the “blouse tax.” The measure passed with an overwhelming majority of 380 votes in favor and 26 against.
Originally part of the Green Mobility and Innovation Bill (MOVER) aiming to boost the automotive industry in Brazil by promoting the adoption of clean vehicles, the tax’s inclusion has added a new layer of complexity to an already multifaceted legislative proposal.
MOVER, also referred to as Bill (PL) 914⁄24, was designed to foster the development of less polluting vehicles by providing financial incentives and reducing the Tax on Industrialized Products (IPI).
However, the international purchase tax was a late addition to the bill, requested by Deputy Átila Lira from the right-wing Progressive Party, who serves as the bill’s rapporteur. In Brazilian political jargon, the inclusion of such an unrelated measure in a project is referred to as a “tortoise,” likening it to the idea of finding a tortoise in a tree: If it’s there, someone put it there.
A tax on imported goods from e‑commerce platforms
This legislative maneuver has raised eyebrows and drawn criticism from various sectors, with many questioning the rationale behind linking international purchase taxation to an environmental innovation bill.
Last week, Senate rapporteur Rodrigo Cunha from the right-wing Podemos Party decided to withdraw the tax, prompting controversy and further review by parliamentarians, so it was included back on the vote.
The Chamber approved the bill again, including the modifications from the Senate. To become law, the bill still needs to be approved by President Lula.
If the measure is ultimately upheld, it would impose a 20% import tax on international purchases of up to 50 dollars.
This tax is expected to significantly impact consumers who frequently shop on popular Asian e‑commerce platforms like Shein, AliExpress, and Shopee. The term “blouse tax” originated due to the high volume of clothing purchases on these platforms.
But despite consumer outcry, political scientist Ueber José de Oliveira sees the potential tax as a necessary protectionist measure. “The national industry and retail cannot compete with Chinese trinkets,” he told to Brazilian news site A Vírgula, criticizing the neoliberal belief in a self-regulating market as “ideological madness.”
Economist Clóvis Vieira supports this perspective, arguing that while the tax may not significantly boost government revenue, it would enhance the competitiveness of local businesses. Vieira emphasized that the current tax exemption for international purchases distorts the market, placing domestic producers at a disadvantage.
Brazil’s national industry is declining, with its contribution to gross domestic product dropping from 36% in 1986 to around 11% today. Oliveira suggests that alongside retail taxation, there is a critical need for investment in the capital goods industry to reduce dependency on imported equipment.
Moving against fast fashion
The proposed tax has faced backlash, particularly from international retailers and consumers who rely on affordable imports.
Shein, which caters primarily to Brazil’s lower-income classes, criticized the bill, claiming the tax would substantially increase consumer costs. According to the Chinese e‑commerce platform Shein, a dress that currently costs 82 reais (15 dollars) could rise to over 98 reais (around 18 dollars) due to the new tax burden.
In response to the new measure, AliExpress said it was “surprised” and claimed that the tax would mainly affect the country’s poorest, as well as discourage foreign investment.
But despite its popularity, Shein has come under scrutiny for alleged labor law violations and its environmentally damaging fast fashion model. Critics argue that the company’s business practices, which involve rapid production of low-cost clothing, contribute to significant environmental degradation.
The president of the Brazilian Institute of Planning and Taxation, João Eloi Olenike, has also taken a stand against the tax exemption for international retailers, arguing that it creates an imbalance in competition.
In an interview with the BBC, he argues that if a Brazilian retailer imports an item from China that is also sold by a digital retailer like Shein directly in Brazil from China, the Brazilian company will face a higher tax burden, whereas Shein avoids these additional costs, giving it a competitive advantage over local businesses.
The broader bill, including the Green Mobility and Innovation Program, aims to allocate 19.3 billion reais (approximately 3.6 billion dollars) in tax incentives until 2028 to promote the production of clean vehicles.
However, the inclusion of the international purchase tax has shifted much of the focus and debate.
After consultations with his finance minister and Lira’s deliberations with legislative leaders, President Lula has committed to not vetoing the measure, despite having previously threatened to do so.
The executive and legislative branches, where right-ring parties dominate, appear to have reached a consensus on the 20% tax rate, viewing it as a step towards economic protectionism and national industry support.
But Clóvis Vieira said it is being viewed as yet another unpopular measure by Lula.
