Starting from April 1st, ten states in Brazil will increase the state-level Value-Added Tax (ICMS) rate on cross-border purchases to 20%, up from the previous 17%. This adjustment only applies to the following ten states: Acre, Alagoas, Bahia, Ceará, Minas Gerais, Paraíba, Piauí, Rio Grande do Norte, Roraima, and Sergipe. Prior to this change, all 26 states and one federal district in Brazil had a uniform tax rate of 17%.

In addition to the state-level ICMS tax rate adjustment, cross-border purchases of goods valued below $50 will also be subject to a 20% federal import tax, which has been in effect since August 2024.

According to major importers, this tax rate adjustment will result in an overall tax rate of 50% of the product value for cross-border purchases below $50. For example, an item priced at 100 Brazilian reais will have a "total price" of 150 Brazilian reais after customs duties and VAT.

Local retailers believe that Brazilian businesses face higher taxes compared to cross-border purchases. They see this increase in the ICMS tax rate as a step towards "tax fairness." This decision was made by the National Council of Finance Secretaries (Comsefaz) in December last year but is officially taking effect in April this year.

The Comsefaz committee stated, "This change strengthens the commitment of each state to promote national industrial and commercial development in a globalized context, advancing fairer tax policies, and helping to protect related industries and markets within Brazil."

In 2024, states had considered raising the national cross-border purchase VAT rate to 25%, but this decision was ultimately postponed. State governments have stated that the purpose of this tax rate increase is to ensure "fair competition between imported goods and domestic products, encouraging Brazilian consumers to purchase more local products."

The Comsefaz committee added in their December statement last year, "Through this measure, Brazilian states hope to strengthen domestic production sectors and expand employment opportunities in the context of increasing competition in cross-border e-commerce."