Brazil - Customs and duties

Since the late 1980s, the government has reduced import duties incrementally to encourage trade. Tariffs are based on the MERCOSUR common external tariff, known in Brazil as the TEC. The average applied tariff rate was 13.7% in 2000, down from 32% in 1990. There is an industrial products tax (IPI) that usually ranges from 0% to 15%, but goes up to 365% on cigarettes and alcoholic beverages. There is also an ICMS (merchandise and service circulation) tax on goods moved through Brazil, at 18% in Sao Paulo, and 12% in other Brazilian states. All imports and exports are controlled by SECEX, the Foreign Trade Secretariat, with the help of the SISCOMEX computer system.

Certain sectors, including petroleum products and weapons, require departmental or ministerial approval for imports. Importers must pay state and federal value-added taxes at ports, but these may be recovered for goods to be manufactured or sold in Brazil. There are eight free trade zones, including the oldest one in Manaus, and others in Macapa/Santana, Tabatinga, Guajaramirim, Bonfim, Paracaima, Brasileia, and Epitaciolandia. These zones and some energy development projects are exempted from import duties, as long as they export at least 90% of production.

Brazil and its MERCOSUR partners implemented a common external tariff in 1995, which increased by 3% in 1997 to 23%, to cover all tariff items by 2006. The 3% increase is being phased out, a process which will be completed sometime in 2002–2003.