Brazil Cuts Import Duties on eReaders, Drops Taxes on eBooks
Earlier this week ZDNet and other sites reported that Brazil’s supreme court had reduced or eliminated taxes and import duties on ereaders and ebooks, but I think they are missing the story.
From ZDNet:
E-books are set to become more affordable in Brazil as the Supreme Court has ruled that they will now enjoy the same tax immunity as the pronto counterparts.
The debate on whether e-books should have the same tax treatment as print has been going on since September 2016 and the final ruling on the matter is that print and e-books are indistinguishable from each other.
In addition, reading devices such as the Amazon Kindle will also be tax-immune. However, the ruling stressed that this immunity is not extended to multifunctional devices that may support book reading software such as tablets, smartphones and laptops.
It is expected that in the next few months prices will be lowered across the purveyors of digital content operating in Brazil
According to Wikipedia, Brazil’s standard VAT rate is 42%, while books are tax exempt. This means that Brazilian ebook prices could drop by half in the near future.
And just as importantly, so could the price of ereaders.
Brazil has magnificent import duties which sometimes exceed the price of the imported product by a factor of two. The duties are not reflected in the price of the Kindle, which sells in Brazil for about 30% more than the US price, but 3rd-party ereaders imported by Brazilians can easily cost twice the list price.
Now much of the import duties have been removed (but not all – some Brazilian states impose their own sales taxes).
And that means ereaders are going to get a lot cheaper in Brazil – and Brazilians are probably going to see ereader prices drop a lot faster than ebooks.
After all, how do you know that publishers won’t just keep ebook prices high so they can pocket the difference?
image by Rodnei Reis
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