Foreign trade issues are subjected to the rigors of tax validity and anteriority in a softened format, due to the dynamism of the activities involved and the relevance and need for customs control. However, this does not mean that the setting of Import Tax rates is completely outside tax validity.
The Federal Constitution says in its articles 153 and 237:
"Article 153. It is incumbent upon the Federal Government to institute taxes on:
I - import of foreign products;
II - export, offshore remittances, of national or nationalized products;
III - income and proceeds of any kinds;
IV - industrialized products;
V – credit operations, exchange and insurance, or related to securities or securities;
VI – ownership in the capacity of owner of rural territory;
VII - large fortunes, under the terms of a complementary law.
VIII – production, extraction, commercialization or import of goods and services that are harmful to health or the environment, under the terms of a complementary law.
Paragraph 1 - The Executive Branch is empowered, in compliance with the conditions and limits established by law, to change the tax rates listed in items I, II, IV and V.
Article 237. The inspection and control over foreign trade, essential to the defense of national tax interests, will be exercised by the Ministry of Finance."
As noted, article 153 gives the Federal Government the competence to institute Import Tax and, at the same time, allows the Executive Branch to change its rates.
The Constitution itself, however, adds a caveat about the change in the rates, by determining that "the conditions and limits established by law are met". In parallel, article 237 of the Constitution assigns to the Ministry of Finance the competence to inspect and control foreign trade.
In summary, therefore, the Federal Constitution allows the Executive Branch to change the rates of the Import Tax, provided that "the conditions and limits established by law are met". In addition, it assigns to the Ministry of Finance the inspection and control over foreign trade.
Let us see how the specialized doctrine treats the aspects commented on:
"We have here (article 153, paragraph 1 of the FC) a mitigation of the requirement of law for definition of the rate. I say mitigation because it is not totally dispensed with, insofar as there is a need for an ordinary law that defines a basic rate or that establishes a tariff and necessarily defines the conditions and limits within which the Executive can change it."[1]
Or even:
"There is not, in this constitutional provision (article 153, paragraph 1 of the FC), any exception to the principle of validity. Only the Magno Text allows, in this case, the law to delegate to the Executive Branch the power and to vary, subject to certain conditions and within the limits that it establishes, the rates (not the calculation bases) of the aforementioned taxes.
In fact, if the Executive Branch – by upgraded exception of the Magno Text – can only change the rates of the aforementioned taxes "in compliance with the conditions and limits established by law", how can we maintain that they accept to be created or increased by a legal rule different from the Law?"[2]
The plenary of the Federal Supreme Court (STF) has already had the opportunity to rule on the constitutionality of the ban on the import of used goods. The Supreme Court approved this prohibition in the cases of import of used tires and used cars, for example. The prevailing understanding was that, if the import of tires and used cars were allowed, Brazil would become a park of scrap metal and environmental waste.
We do not disagree with the guiding basis of the precedents on the prohibition of import of used goods. But they do not sanction the unrestricted prohibition to import any used good.
Unlike goods with a short useful life, there are used goods with a long useful life, which are of great interest to the country, as seen in the situation that generated Cosit Consultation Solution 122/20. Provoked to express itself about the possibility to import a robotic surgical system, the Federal Revenue Service of Brazil, in the aforementioned solution, recognized this possibility, in the validity of Camex resolutions 90/17 and 309/19:
"Subject: Import Tax - II
IMPORT WITH EX-TARIFF. APPLICABLE TO NEW AND USED GOODS.
The Ex-tariff granted under the terms of Ordinance ME No. 309, of 2019, which reduces the rate of the Import Tax, is applicable to both the import of new and used goods, including the so-called remanufactured or "refurbished", incorporated into the asset fixed assets.
Legal Provisions: Law No. 3,244, of 1957, art. 4, caput and § 1, "a", as amended by Decree-Law No. 63, of 1966; Camex Resolution No. 90, of 2017, art. 3; and Camex Resolution No. 309, of 2019, art. 1."
The Federal Revenue Service was right to list Law 3,244/57 as the first basis for the validity of Cosit Consultation Solution 122/20. It is precisely this law – still in force – that provides for the Import Tax rates:
"Art.2 - The Import Tax shall be charged in the format established by this Law and by the Brazilian Customs Tariff, by means of an 'ad valorem' or specific rated, or by the combination of both.
Exclusive Paragraph. The specific rate may be determined in national or foreign currency, and may be acknowledged and agreed with the provisions of Article 3, modified by Article 5 of Decree-Law No. 63, of November 21, 1966, and by Article 1 of Decree-Law No. 2,162, of September 19, 1984."
Until now, everything was in order and acknowledged and agreed with the constitutional dictates.
It so happens that, recently, more precisely on August 18, 2023, the Executive Management Committee of the Chamber of Foreign Trade (Gecex) published Gecex Resolution 512/23. By providing for temporary reductions in the Import Tax rate for capital goods, among others, the resolution established the following:
"Art. 2 The decrease, reduction of the rated Import Tax on Capital Goods, Information Technology and Telecommunications, as well as their parts, parts and components, without equivalent national production, indicated in the Common External Tariff - TEC such as BK or BIT, may be granted as Ex-tariff, in accordance with the requirements and procedures established in this Resolution.
(...)
Paragraph 2 - The reduction, reduction of the import tax rate provided for in the caput does not inapplicable to:
(...)
II - used goods;"
It is seen that Gecex Resolution 512/23 explicitly prohibited the possibility to import any used capital good. It seems to us that Gecex has exceeded itself.
In the preamble of Gecex Resolution 512/23, article 6, subparagraph IV, of Decree 11,428/23 is invoked as the normative basis for the competence attributed to Gecex:
"Article 6 The Executive Management Committee is responsible for:
(...)
IV - to establish the import tax rates, subject to the conditions and limits established by law;"
However, although it is true that the regulation establishes that it is up to Gecex to "establish the import tax rates", the caveat was made to observe "the conditions and limits established by law". And it is precisely the caveat contained in Gecex Resolution 512/23 itself that was forgotten by the committees, leading it to the vice of unconstitutionality.
As said, the Federal Constitution, in article 153, paragraph 1, allows the Executive Branch to change the rates of the Import Tax. It highlights, however, the need to observe "the conditions and limits established by law".
The law mentioned by article 153, paragraph 1, of the Federal Constitution is precisely Law 3,244/57, which sets the rates and other limits of the Import Tax. There is no doubt about the possibility of Gecex changing the Import Tax rates. This issue is already a written record by the plenary of the STF.[3]
The central point is that Gecex, in the use of the attribution delegated to it by paragraph 1 of article 153 of the Federal Constitution, must necessarily observe "the conditions and limits established by law", under penalty of exceeding the competence constitutionally attributed to it.
In this exact context, it is definite to pay attention to the conditions established by article 4 of Law 3,244/57:
"Art.4 - When there is no domestic production of raw material and any commodity product, or the domestic production of these goods is insufficient to meet domestic consumption, exemption or decrease, reduction of the tax for total or complementary imports may be granted, as applicable.
Paragraph 1 - The exemption or reduction, reduction of the tax, according to the characteristics of production and commercialization, and at the discretion of the Customs Policy Council, shall be granted:
a) upon proof of the non-existence of national production, and, if there is production, upon proof, prior to customs clearance, of the acquisition of a certain quota of the national product at the respective source, or proof of refusal, inability or impossibility of supply on time and at the normal price;
b) through the establishment of global tariff quotas and/or for a determined period, which does not exceed one year, or percentage quotas in relation to national consumption.
Paragraph 2 - The concession shall be of a general nature in relation to each type of product, guaranteeing the full acquisition of national production, observing, as to the price, the definition of Article 3 of Decree-Law No. 37, of November 18, 1966.
Paragraph 3 - When, due to ground, reason of shortage in the domestic market, it becomes imperative to acquire offshore remittances of basic foodstuffs, raw materials and other basic products, it may be granted for their import, by act of the Customs Policy Council, exemption from import tax and customs ordering fee, after hearing the agencies linked to the execution of the supply and production policies.
Paragraph 4 - The validity period of the receipts of the acquisition of the national product quota provided for in this article and in the related notes of the Customs Tariff shall be a maximum of one year to compute from the issuance.
Paragraph 5 - The exemption from the import tax on raw material and any other basic product, industrialized or vel non-industrialized, even those of direct application, may only benefit the complementary import of national production if the rules hereof article are observed."
In other words, among the legal conditions that the Executive Branch needs to observe to change the Import Tax rates, is the possibility of granting exemption from the tax "when there is no national production of raw material and any basic product, or the national production of these goods is insufficient to meet domestic consumption".
There are already positions in the doctrine that are in line with this understanding, as Leonardo Branco exposed in an article on the subject:
"It should be noted, however, that the functions of Gecex must stick to validity, that is, observing the conditions and limits established by law when formulating guidelines and editing rules for tariff policies in import and export, and it is not possible to create a new restraint not provided for by the legislator.
The criteria for granting the tariff exception in question are set out, as pointed out by the RFB itself, in article 4 of Law No. 3,244/1957, and in subparagraph I of article 14 of Decree-Law No. 37/1966, according to which exemption from customs duty may be granted to capital goods intended for the implementation, expansion and refitting of construction projects. essential aspects of interest for the economic development of the country, without distinction in the treatment between new and used goods.'"
Thus, although the legitimate interest of Gecex to preserve the national industry is understood, it is relevant to strictly observe "the conditions and limits established by law", as required by article 153, paragraph 1, of the Federal Constitution.
The absolute prohibition of the import of used capital goods, in addition to violating the legal conditions contained in article 4 of Law 3,244/57, also harms national interests, by preventing the access of Brazilians to capital goods that are not produced in the domestic market or that are produced in insufficient volume to meet domestic demand.
[1] PAULSEN, Leandro. Tax Law, Constitution and Tax Code, in the light of doctrine and jurisprudence, 16th edition, page 321
[2] CARRAZZA, Roque Antônio. Course on Constitutional Tax Law, 19th edition, page 270
[3] Extraordinary Appeal 570,680; Precedent/STF 404
