2024-11-29 17:25:00
Os Mail face an unprecedented financial crisis. The state-owned company recorded a loss of R billion in the first nine months of 2024, a value that contrasts with the Negative R$824 million of the same period in 2023. One of the factors that worsens the situation is precisely the end of tax exemption for imports of up to US$ 50a measure that became known as the “blouse tax”.
Summary of what you need to know:
- Mail accumulate record loss of R$2 billion in 2024, tripling the losses from the previous year.
- The end of tax exemption for purchases of up to US$50 drastically reduced the volume of international imports.
- The state-owned company’s revenue from international operations fell from R$3.3 billion to R$3.1 billion in nine months.
Brazilians stopped importing and Correios is impacted
The new taxation came into effect in August and has already had visible impacts. First, it is clear that Brazilians have stopped buying on international platforms such as Shein e AliExpress which resulted in a drop in 40% on imports.
As a result, the Post Office’s revenue international operations (cross border) between July and September fell from R$ 1.3 billionin 2023, to just over R$ 1 billion in the same period this year. The reduction in order volume not only decreased revenue, but also affected the company’s logistics and operational efficiency.
In practice, the measure implemented by the Lula government to increase tax revenue ended up discouraging Brazilians from making purchases on international websites. Products that were previously affordable became more expensive, and consumers began to look for alternatives in the domestic market, reducing demand for delivery services.
Now, Correios is looking for new strategies to maintain its relevance and overcome the drop in revenue, but the scenario suggests that, without significant changes, the negative numbers could persist.
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#imports #increases #Post #Office #losses
What other factors besides the end of the tax exemption are contributing to the financial crisis facing Correios?
## Interview: The Impact of Ending Tax Exemption on Brazil’s Postal Service
**Host:** Welcome back to the show. Joining us today is Professor Alex Reed, an economist specializing in international trade. Professor, thank you for being here.
**Professor:** It’s my pleasure.
**Host:** Today we’re discussing the financial crisis gripping Brazil’s postal service, “Correios”. They’ve reported a staggering R$2 billion loss for the first nine months of 2024. How significant is this, and what are some of the contributing factors?
**Professor:** This loss is incredibly significant, especially when compared to the R$824 million loss during the same period last year. Several factors contribute, but the end of the “blouse tax,” meaning the tax exemption on imported goods valued up to US$50, is a major culprit.
**Host:** Can you explain how this exemption ending impacts Correios?
**Professor:** Prior to its end, Correios benefited from handling a large volume of small import packages. These goods enjoyed tax exemption, making them more affordable for consumers. Now, with the exemption gone, the cost of these imported goods has risen, likely leading to a decrease in demand. This directly impacts Correios’s revenue stream and volume of packages handled.
**Host:** So, essentially, the lower volume of imports translates to fewer packages for Correios to deliver, leading to less revenue?
**Professor:** Exactly. It’s a crucial aspect of their business model that is now under pressure.
**Host:** Are there other factors at play?
**Professor:** Certainly. Rising operational costs, increased competition from private courier services, and inefficient internal processes all add to the financial strain.
**Host:** Thank you, Professor, for shedding light on this complex issue. It’s clear that Correios faces some serious challenges ahead.
