Taxes represent up to 72% of the value of most popular products on Black Friday

A few days before Black Friday, Brazilians are already starting to look for promotions. Among the most sought after products in the period appear electronics and household appliances, some of the items most impacted by government taxes.

A survey of the CNN Based on data from the Brazilian Institute of Planning and Taxation (IBPT), it highlights that the taxes embedded in some of these goods can represent up to 72% of some of the most coveted products by Brazilians.

“All this cost ends up being passed on in the price to the final consumer – this is what is called tax repercussions. Consumers who intend to buy especially electronics and household appliances should pay attention to the tax rate of products, since approximately half of the value of a product in Brazil is taxed”, said Cláudio Carneiro, professor of tax law and compliance at Faculdade Instituto.

The survey shows that, among the most sought after products on Black Friday, the three most impacted by government taxes are video games, smartphones and tablets. Taxation of these items represents 72.18%, 68.76% and 59.35% of the final price of goods, respectively.

The value of the Playstation 5 for the final consumer is around R$ 6 thousand. If the device were not taxed, the price in stores would be R$ 1,600. In the same perspective, the value of the Iphone 13 would go from R$ 9,200 to R$ 2,800.

“Superfluous goods are usually the most taxed by the government. The less essential the product, the higher the tax applied to it”, emphasizes André Braz, an economist at the Getúlio Vargas Foundation (IBGE).

When imported products arrive in Brazil, taxes are added, such as the tax on industrialized products (IPI), the PIS/COFINS, a rate imposed by the federal government, and the Tax on Circulation of Goods and Services (ICMS), charged by Brazilian states.

The amount of ICMS charged by Rio de Janeiro, São Paulo and Minas Gerais is 18%. Therefore, the final price to the consumer is the result of the item’s production value, the four taxes and the profit of the establishment that sells the goods.

Despite the promotions on Black Friday, the tax lawyer, Roberto Nogueira, says it is necessary to be cautious when shopping during the period. He points out that there is no ‘tax settlement’ and, therefore, taxes are not reduced on that day.

“For this reason, it is important to carefully analyze whether the operation involves offering aggressive discounts, as well as taking into account the tax burden of the products and services offered so as not to suffer the loss”, explains the tax expert.

TO CNN, the professor at FGV, Gabriel Quintanilha, stated that Brazilian taxation is ‘very confusing’ and mentioned other countries, such as the United States and Germany, which have only two rates on imported products. According to him, the tax reform is the main way to reduce the price of products in Brazil.

“Most countries in Europe and the United States have much less complex tax systems than ours. In the North American country, for example, a tax is only paid upon entry of the product and a tax on the final sale to the consumer, known as “Tax Sale”. We urgently need a tax reform, because currently the taxation in the country is quite confusing”, he concluded.

Proposed by the federal government, the tax reform bill is waiting to be voted on in the Chamber of Deputies and the Federal Senate. There is no forecast for the vote to take place yet.