Mobile Devices in Brazil: Government reduces taxes on smartphones
A decree signed by President Dilma Rousseff and published on Tuesday (9) reduces to zero the PIS and COFINS on the sale of so-called smartphones, cell phones with internet access, costing up to R$ 1,500 (around US $ 760.00) and are produced in Brazil. Together, the two taxes had a rate of 9.25%.
End customers should see prices of these phones going down in stores later this week, according to Communications Minister Paulo Bernardo. For this to happen, all that is need is the publication of an ordinance that will specify the characteristics of the devices that fall under the measure, which shall take place until Friday (12).
Since the exemption is on the sale of the mobile devices, even the equipment already in stores will have their price reduced.
The tax relief is estimated at about R$ 500 million (over 250 million US Dollars) per year from 2014. The exemption should lead to a reduction in the final price to the consumer up to 30% compared to imported smartphones, reported the Ministry of Communications. According to the data presented by the ministry, about 27% of phones sold in Brazil today are smartphones and is numbers are expected to reach 50% in 2014.
Brazil currently has about 65 million active smartphones, and the Brazilian government is expecting that this number will reach 130 million by next year.