With the end of the year festivities behind us, now is the time to focus entirely on Carnival, which is already approaching. The date moves a large chain of products and services, and the expectation of profit is high – in the state of Rio de Janeiro alone, the perspective is that the economic impact exceeds 4 billion reais, according to a survey by Riotur, the public company responsible for organize the carioca revelry.
Despite the optimistic projection, the country’s economic scenario remains challenging – according to the Focus report released by the Central Bank on January 16, the market forecast for the Extended National Consumer Price Index (IPCA) for 2023 rose from 5.36 % to 5.39%, suffering the fifth consecutive increase. The report also points to an increase in the interest rate (Selic) from 12.25% to 12.50% this year, the second increase in a row.
Added to this the high tax burden on the main products and services consumed in the period, the revelry bill promises to be expensive.
“The principle of tax selectivity provides for a differentiation in the collection of taxes between items considered essential, such as some clothing items and food products from the basic basket, and items considered superfluous. Most of the products consumed at Carnival are considered superfluous and, therefore, have a higher tax burden”, explains Giuliano Gioia, tax lawyer and Tax Director of Sovos Brasil.
tribute revelry
According to data from the Impostometer, those who choose to enjoy the date in character will feel the lion’s bite. Fabric costumes are taxed at 36.41%; mask with sequins, 42.71%; Hawaiian necklace, 45.96%; and hair styling, 26.32%. Items such as confetti and serpentine account for 43.83% of taxes, and spray foam, 45.94%.
For those who prefer to escape the revelry, the “hotel, ticket and van” package to watch the Carnival parades is taxed at 36.28%, hotel accommodation, 29.56%, and airline tickets, 22.32%.
“The taxes that most burden Carnival products and services are the ICMS (Tax on Circulation of Goods and Provision of Services) and the IPI (Tax on Industrialized Products). Therefore, the tip to enjoy the date without breaking the budget is to plan, do a lot of research and use creativity to save on parties and costumes”, suggests Giuliano.
Source: Anna C Del Mar