Brazilian textile and digital-platform groups are backing a congressional proposal to return part of future consumption taxes to low-income families who buy clothing and household textiles, after President Luiz Inácio Lula da Silva revoked a federal levy on small international online purchases.
The bill, introduced by federal deputy Augusto Coutinho of Republicanos, would expand the cashback mechanism created under Brazil’s tax reform. It would apply to families registered in CadÚnico, the federal registry used to identify low-income households for social programs.
What the Bill Would Do
The proposal would refund 50% of the CBS, a new federal goods-and-services contribution, and 20% of the IBS, a new state and municipal goods-and-services tax. Both levies are part of Brazil’s broader tax overhaul, which is replacing a complex set of consumption taxes with a value-added tax model.
The cashback would cover purchases of clothing and bed, table and bath items. Coutinho argues that the measure would lower prices for essential goods, encourage consumers to request invoices and help move retail activity into the formal economy.
“Besides making the customer pay less, the measure will stimulate formal commerce and job creation, because it will be necessary to ask for an invoice to access the benefit,” Coutinho told Folha de S.Paulo.
According to Poder360, the bill is stalled in the Chamber of Deputies. An urgency request was filed on April 28 to speed up its review, but there is no date for a floor vote.
Import Tax Reversal
The proposal gained attention after Lula signed a provisional measure on May 12 ending the so-called “taxa das blusinhas,” or “little blouse tax,” a popular label for the 20% federal import tax on online purchases of up to $50. The expression became shorthand in Brazil for low-value orders from foreign e-commerce platforms, especially fashion products.
The repeal does not change ICMS, a state-level goods circulation tax that can still apply to such purchases and varies by state. The provisional measure lasts 60 days and can be extended once for another 60 days, meaning Congress must decide whether to preserve or overturn it close to the 2026 election campaign.
G1 reported that lawmakers from the Centrão, Brazil’s powerful bloc of pragmatic congressional parties, and opposition parties see the reversal as politically timed. Government allies say the measure has popular appeal and should not be controversial if the opposition also supports lower taxes on consumers.
Industry and Platform Response
Abit, the Brazilian Textile and Apparel Industry Association, said the cashback idea recognizes clothing and home textiles as essential goods for families. Its executive director Fernando Pimentel told Poder360 the mechanism could reduce the regressive effect of consumption taxes and encourage purchases through formal businesses.
Pimentel also argued that Brazil’s textile and apparel sector remains important for industrial employment, has a presence in thousands of municipalities and employs many women. He said the proposal could strengthen documented transactions, tax collection and formal jobs.
Amobitec, an association representing online-platform companies, also described the proposal positively. It said it supports initiatives that expand access by lower-income consumers to lower-cost essential goods sold through international e-commerce platforms, while maintaining an innovative business environment.
The debate reflects a wider policy problem for Brasília: how to lower costs for consumers without further weakening domestic producers that say they face heavy taxes, regulation and competition from cheaper imports. Some opposition voices and business-friendly commentators cited by Jovem Pan News argued that Congress and the government are patching the tax system rather than lowering the broader burden on Brazilian production.