3 ms·

Why are tech products so expensive in Brazil? Are they taxed heavily?

by nik736 4y ago

deleted 4y ago
[deleted]
htaunay 4y ago
Yes, in theory around 40% -> 50%, with it fluctuating over time. However in practice imported electronics tend to cost up to about 100% then their original price abroad for several reasons, usually but not exclusively related to difficulties in 3rd world countries e.g. bribes necessary to get the shipment, insurance over shipment theft, margin risk due to volatile forex, etc For example, atm an iPhone 14 costs 800 USD in the US Apple Store and 7600 Brazilian Reais in the Brazilian one. With the current exchange rate at ~5.20, that's around 80% more. Not that bad actually, that ratio has been worse in the past.
- myth2018 4y ago
  > e.g. bribes necessary to get the shipment, insurance over shipment theft, margin risk due to volatile forex, etc Sorry but this is one of the many plain lies companies tell in order to justify their overpriced products.
scrose 4y ago
It’s not just tech, that’s just the most obvious to us here. Anything that’s good quality that needs to be imported is usually almost twice the price there. I saw this especially with climbing equipment
danrocks 4y ago
Weak currency plus up to 78% importing tax on some types of products. When I worked at <big hardware company> in Brazil, our math was to multiply the user price in USD by 3.7x to establish the price in BRL. iPhone: $800 iPhone in Brazil: $3000 Now with the currency in the toilet and companies "manufacturing" in Brazil (basically just assembling ready-made kits shipped from China) the multiplier is no longer valid, but still, an iPhone 14 basic model is $1461. For purchase parity calculations: $1461 is about 7 minimum wages in BRL. If that held for the US, an iPhone here would cost some $7500. Harsh. When the currency was strong, it was even worse. When I moved back to BR in 2011, BRLUSD was something like 0.9 (strong BRL), and a VW Jetta cost around USD 45000. Harsh.
myth2018 4y ago
There's a number of factors, but I'd say the most important ones are: 1. taxes, although it varies. Imported consumer electronics are taxed more heavily. However, there are regions with fiscal incentives for companies to install their factories here. Products manufactured in such regions are not as nearly expensive; 2. an excess of credit offered by banks. This created an extremely pernicious cultural habit: people don't evaluate the product's price, but the loan's installment size -- regardless of how expensive is the product, the interest paid to the bank, the number of installments etc. 3. there's a fetish for fancy and expensive stuff, they bring social status, and people are idiot enough to accept the prices -- and, with the aforementioned excess of credit, no lack of money can prevent them from shooting their own heads. These are essentially the same reasons why cars are also so expensive here. Manufacturers say it's because taxes, and ~ 100% of customers buy this bullshit, but this has already been proved wrong a number of times. For any brazilians doubting it, I invite you guys to: 1. look up any article comparing prices of Brazilian-manufactured cars sold locally vs their prices when exported to Mexico. The difference on taxes don't explain the end prices, and the manufacturers and ANFAVEA never provided an explanation for that 2. a statement from Toyota's CEO when visiting Brazil, probably unaware of local idiosyncrasies and the fib told by manufacturers, including themselves: "why should we charge less for our cars if they are paying?"; and then he tried to fix it with a "the prices we charge in Brazil are the fair ones, it's the rest of the world that forces us to charge too little." 3. Nintendo closing its factory due to "an excess of taxes and bureaucracy" while Sony and Microsoft local factories were doing pretty well in the very same market 4. The small credit crisis from 2011 that made car prices to drop extremely sharply within 1 month or so
- myth2018 4y ago
  Ah, and I forgot to mention: In 2011, when JAC Motors started to sell cars for cheaper, you saw what happened: government raised taxes over imported cars (maybe a result of a lobby from the other manufacturers?) That's what happens when 1 manufacturer decides to sell cars for a fair price here.

Why are tech products so expensive in Brazil? Are they taxed heavily?

by nik736 4y ago

Why are tech products so expensive in Brazil? Are they taxed heavily?

deleted 4y ago

[deleted]

htaunay 4y ago

Yes, in theory around 40% -> 50%, with it fluctuating over time. However in practice imported electronics tend to cost up to about 100% then their original price abroad for several reasons, usually but not exclusively related to difficulties in 3rd world countries e.g. bribes necessary to get the shipment, insurance over shipment theft, margin risk due to volatile forex, etc For example, atm an iPhone 14 costs 800 USD in the US Apple Store and 7600 Brazilian Reais in the Brazilian one. With the current exchange rate at ~5.20, that's around 80% more. Not that bad actually, that ratio has been worse in the past.

myth2018 4y ago
> e.g. bribes necessary to get the shipment, insurance over shipment theft, margin risk due to volatile forex, etc Sorry but this is one of the many plain lies companies tell in order to justify their overpriced products.

scrose 4y ago

It’s not just tech, that’s just the most obvious to us here. Anything that’s good quality that needs to be imported is usually almost twice the price there. I saw this especially with climbing equipment

danrocks 4y ago

Weak currency plus up to 78% importing tax on some types of products. When I worked at <big hardware company> in Brazil, our math was to multiply the user price in USD by 3.7x to establish the price in BRL. iPhone: $800 iPhone in Brazil: $3000 Now with the currency in the toilet and companies "manufacturing" in Brazil (basically just assembling ready-made kits shipped from China) the multiplier is no longer valid, but still, an iPhone 14 basic model is $1461. For purchase parity calculations: $1461 is about 7 minimum wages in BRL. If that held for the US, an iPhone here would cost some $7500. Harsh. When the currency was strong, it was even worse. When I moved back to BR in 2011, BRLUSD was something like 0.9 (strong BRL), and a VW Jetta cost around USD 45000. Harsh.

myth2018 4y ago

There's a number of factors, but I'd say the most important ones are: 1. taxes, although it varies. Imported consumer electronics are taxed more heavily. However, there are regions with fiscal incentives for companies to install their factories here. Products manufactured in such regions are not as nearly expensive; 2. an excess of credit offered by banks. This created an extremely pernicious cultural habit: people don't evaluate the product's price, but the loan's installment size -- regardless of how expensive is the product, the interest paid to the bank, the number of installments etc. 3. there's a fetish for fancy and expensive stuff, they bring social status, and people are idiot enough to accept the prices -- and, with the aforementioned excess of credit, no lack of money can prevent them from shooting their own heads. These are essentially the same reasons why cars are also so expensive here. Manufacturers say it's because taxes, and ~ 100% of customers buy this bullshit, but this has already been proved wrong a number of times. For any brazilians doubting it, I invite you guys to: 1. look up any article comparing prices of Brazilian-manufactured cars sold locally vs their prices when exported to Mexico. The difference on taxes don't explain the end prices, and the manufacturers and ANFAVEA never provided an explanation for that 2. a statement from Toyota's CEO when visiting Brazil, probably unaware of local idiosyncrasies and the fib told by manufacturers, including themselves: "why should we charge less for our cars if they are paying?"; and then he tried to fix it with a "the prices we charge in Brazil are the fair ones, it's the rest of the world that forces us to charge too little." 3. Nintendo closing its factory due to "an excess of taxes and bureaucracy" while Sony and Microsoft local factories were doing pretty well in the very same market 4. The small credit crisis from 2011 that made car prices to drop extremely sharply within 1 month or so

myth2018 4y ago
Ah, and I forgot to mention: In 2011, when JAC Motors started to sell cars for cheaper, you saw what happened: government raised taxes over imported cars (maybe a result of a lobby from the other manufacturers?) That's what happens when 1 manufacturer decides to sell cars for a fair price here.