Government increases import tax on toys from 20% to 35%
O Estado de S. Paulo
Last Christmas, the Chamber of Foreign Commerce (Camex) decided to increase from 20% to 35% import tax of several toys. According to a resolution published yesterday in the Official Federal Gazette, it will become more expensive to purchase tricycles, kick scooters, dolls, cars, electric trains, assembling toys, puzzles, toy musical instruments and other parts with engines abroad. According to the President of the Brazilian Association of Toys Manufacturers (Abrinq), Sinésio Batista da Costa, the increase of the tax rate should help the national industry to re-balance the Brazilian toy market in which the participation of the Chinese already gets to 60%.
The change in the rate did not occur only in Brazil, but also in other countries that integrate the Mercosur. "In Argentina, the Chinese are responsible for 92% of the toy market, besides 98% in Paraguay and 99% in Uruguay", said Costa. According to him, the Governments of those countries are offering tax incentives for the installation of new plants of Brazilian toys in the region. He also emphasized the import rate in the Mercosur for parts of toys fell to 2% since August this year, favoring the growth of the regional production. "Brazil does not produce electronic toys neither does it want to. The market balance we seek is with the increase of the production of dolls, board games and others", he added.
The entrepreneur estimates that, even with the incentives, the region should still take five years to recover the 15 thousand jobs lost in the sector in the past three years. "Every job lost in the industry of the sector in the Mercosur represents the creation of eight new jobs in China, so we're talking about 120 thousand jobs for the Chinese at our expense in that period", said Costa. Despite the increase in the import tax, the entrepreneur said he believes the additional cost should not be passed on to the consumer. For him, the prices should remain stable, with the difference being absorbed by the import and resale chains. Besides, he said, the prices practiced this Christmas already were, on average, 4% lower than those of last year. "The measure was taken at the right time. If there were an increase in the tax rate before Children's Week, for instance, there could have been an opportunistic increase in the prices", added Costa.