Tag Archives: consumers

#4 Import taxes (i.e. tariffs)

13 Aug

The price of consumer durables in Brazil is more expensive than in any other large market in the world–hands down.  This does not seem to jive with the plight of the median Brazilian, who earns somewhere around $1000R ($600US) a month (minimum wage is about $550R a month. If anything, purchases of goods that can abet social and economic advancement, such as computers, should be subsidized. Yet Brazil’s tariffs average close to 30 percent on a number of items, items which are even exempted from the regional Mercosur tariff-reducing agreements. Brazilians pay a premium for imports of footwear, motorized vehicles and electronics.

These money-grabbing import tariffs à la 1920s were originally designed to protect nascent domestic industries, which by now should be plenty mature and ought to be left to stand on their own. At the very least, one would assume that goods produced domestically should offer a bargain. But because the price of imported computers is so high, Brazilian companies have opted to maximize profits by undercutting imports only marginally. This effectively means that in Brazil you pay double what you would for a laptop in the US or Canada. If Brazil wants to address inequality, it should start by eliminating regressive taxes, i.e. outdated import tariffs, on educational goods such as computers.