Venezuela begins taxing previously exempt Brazilian products, say exporters from Roraima

BRASILIA - Brazilian exporters were surprised by Venezuela 's imposition of an import tax that had previously been waived for Brazilian products entering the country. Companies in Roraima , the state that sends 70% of its exports to Venezuela, with which it shares a border, were the most affected, according to business groups.

According to the Venezuelan-Brazilian Chamber of Commerce and Industry of Roraima, the tax began to be charged on July 18. Brazil has a bilateral agreement with the Chavista dictatorship that exempts the ad valorem import tax (levied on the value of the item) from products entering the country with a certificate of origin.

The Ministry of Foreign Affairs said it is monitoring, in coordination with the Ministry of Development, Industry, Commerce and Services (MDIC), reports of difficulties faced by Brazilian exporters.

"The Brazilian Embassy in Caracas is investigating, together with the responsible Venezuelan authorities, elements to clarify the nature of the situation, with a view to normalizing the fluidity of bilateral trade, governed by Economic Complementarity Agreement No. 69 (ACE 69), which prohibits the collection of import taxes between the two countries," said the Ministry of Foreign Affairs.

Each product has a level of exemption, which can be total in some cases. With the end of the exemption, a 40% tax was levied on products such as sugar and margarine; wheat flour was taxed at 20%, according to the exporters' association.

The charge, which until now was exempt, is made to Venezuelan companies after the 1% tax for customs services and 16% of Value Added Tax (VAT), which is the tax on goods and services in Venezuela.

"The impact is terrible. Taxes are levied in cascades, making it unviable. In this case, we all suffer because Venezuela's demand for food products has been constant," the president of the business entity, Eduardo Oestreicher, told Estadão .

According to him, there are still no technical or political explanations for the tax. The tax is paid by the Venezuelan company, which can then turn to more competitive markets, such as Colombia, Mexico, and Turkey, which worries Brazilian businesspeople.

In 2024, trade between Brazil and Venezuela reached US$1.6 billion, with US$1.2 billion in Brazilian exports - which represents 0.4% of the total exported by the country that year, says Itamaraty in the note.

In a statement, the Federation of Industries of the State of Roraima stated that it has already initiated internal investigations to determine the causes of the incident. "At the same time, we are in direct contact with the competent authorities in both Venezuela and Brazil, seeking detailed clarifications and agile solutions to normalize bilateral trade flows," the statement reads.

The Planning Secretariat of the Roraima government stated that it is following with concern the information about the increase in the Venezuelan government's tax rate, which directly affects products of Brazilian origin exported by the State.

"Venezuela is currently the state's main export trading partner, accounting for more than 70% of the external movement recorded in recent years. Any measure that increases the price of Brazilian products in the Venezuelan market significantly affects the competitiveness of our goods," the note states.

The state government also says it is in contact with the Ministry of Foreign Affairs, the Ministry of Finance and other federal authorities, "seeking clarification and diplomatic alternatives to preserve the balance of the commercial relationship between the two countries."