Brazil: Losses with illegal market increase 4.4% reaching US$59 billion in 2021

RIO DE JANEIRO, BRAZIL – The Brazilian economy lost R$300 billion (US$59 billion) in 2021 to the illegal market. The value is the sum of the losses recorded by 15 industrial sectors, which reach R$205.8 billion, and the estimated taxes that were not collected, of R$94.6 billion.

The data are from the National Forum Against Piracy and Illegality (FNCP) survey, released on March 14. According to Edson Vismona, president of the entity, the numbers give only an idea of the size of illegality, while the actual figures should be even higher.

The estimate of uncollected taxes, for example, is calculated based on a tax percentage of 46%, but there are products, such as cigarettes, where the tax in Brazil can reach 90%. Vismona also reminds us that there are sectors that do not contribute with data for the survey and, therefore, are not accounted for.

The balance sheet showed an increase of 4.4% compared to 2020, when losses for the illegal market reached R$288 billion. The clothing sector is the one that recorded the highest rise in illegality, with losses of R$60 billion, an increase of 11% compared to 2020.

“The losses are not only economic; they are of competitiveness of the national industry. By not paying taxes, the illegal becomes cheaper, causing an unfair and corrosive competition that harms the generation of formal jobs and income for Brazilians,” explains Vismona.

DIGITAL PIRACY

In a pandemic environment, with the increase of digital purchases, the entity also highlights the reproduction of the illegal pattern in e-commerce.

“We identified a lot of illegal product sales in e-commerce. This segment took a big leap in 2020. Illegality in cell phones, for example, was one of the few that grew that year, precisely because of e-commerce,” says Vismona.

He says, however, that companies that have virtual shopping malls, the so-called marketplaces linked to the Institute for Retail Development (IDV), adhered more quickly to the Guide of Good Practices proposed by the National Council for Combating Piracy.

In this group, the discussion about the company’s responsibility to combat online shopkeepers that sell counterfeit or unauthorized products is more advanced. “It is not enough to act after receiving a complaint; we need to be proactive. They have the technology to do this. The internet is not a lawless land,” says the president of FNCP.

On foreign platforms, this conversation is still in its early stages. But Vismona says that, as these companies became more interested in the country and opened Brazilian operations in the last year, there were some advances.

In the case of platforms that sell products from other countries and import these items directly to the final consumer, a practice known as cross border, however, he says it is still widespread for platforms to inform the IRS of an amount lower than that received so that taxes are not collected.

The FNCP survey has been conducted since 2014 and is based on data provided by the productive sectors themselves, which have their own metrics (surveys, market assessment).

The 15 segments included in the FNCP study are clothing, eyewear, cigarettes, cable TV, cosmetics and personal care, alcoholic beverages, fuels, audiovisuals, pesticides, cell phones, imported perfumes, sporting goods, toys, software, and personal computers.

With information from CNN Brasil