Tax elimination on terminal handling charges of the sectoral importers: assessing the economic effects in Brazil

Admir Antonio Betarelli Junior, Edson Domingues, Weslem Faria, Aline Magalhães and Andressa Proque

No 333481, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: In Brazil, the terminal handling charges (THC) or wharfage services at destination for import cargo occurs between the unloading of the goods in the national territory and the customs clearance. This rate inflates the customs value of imported products and the basis for charging all imports on Brazilian imports. Incompatible with the rules of the World Trade Organization (WTO), this practice distorts the competitive trends of Brazilian sectors in the domestic and foreign markets, whose concern is recurrent of the Brazilian commercial policy. Our study contributes to this debate in course and analyzes the economic impacts of THC in the calculation basis for the incidence of taxes. We estimated the annual average THC and simulate their removal in Brazilian import values from a SAM and R&D based computable general equilibrium (CGE) model. With policy change, the main findings indicate the Brazilian economy would become more industrialized and with greater technological intensity in the long run. Investment in physical capital and R&D would grow, while the export and foreign trade agenda would become more diversified in manufactured goods, even with the greater penetration of imports. The expansion of the private sector would ease future dependence on the public sector in the generation of knowledge and physical capital.

Keywords: International Relations/Trade; Public Economics (search for similar items in EconPapers)
Pages: 24
Date: 2022
New Economics Papers: this item is included in nep-des, nep-int and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:333481

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