brazil report 2007

State vat icms state vat is levied on sales or

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Unformatted text preview: T (ICMS) State VAT is levied on sales or physical movement of goods, on freight transportation, communication services and electric energy. The usual rate is around 17-19%, but some products trigger an exceptionally higher rate (usually 25%) or a lower rate. Exports are also exempt. STORE OPENINGS IMPORTS Retailers are free to set opening hours at their sole discretion. Many retailers operate on a seven day week basis and some of them on 24-hours a day. For many years, local industry was protected from imports and the overall tariff burden was high. However, over the last years import duties and trade barriers have been gradually reduced and imports of various products are encouraged when local prices are higher than international prices or when there is a shortage of local products. Import tax is levied on the CIF price and is a non-deductible cost. The rate depends on the degree of necessity and is defined by the product’s tax code. Other taxes like IPI, PIS, COFINS and ICMS are normally levied on imports and are generally applicable to the value-added by each company. 6 2006/2007 FROM SÃO PAULO TO SHANGHAI New consumer dynamics: the impact on modern retailing* Brazil DEMOGRAPHICS AND CONSUMER BEHAVIOUR The largest population in Latin America POPULATION EVOLUTION With over 181 million people, Brazil ranks as the sixth largest in the world and the largest in the region. Population is estimated to be growing at approximately 1.3% per year. Population 2002 Population (m) 2003 2004 2005 176.4 176.8 179.1 181.4 Source: EIU, July 2006 All Brazilians speak Portuguese; English is the foreign language most used by the business community. The majority of Brazilians are of European or African descent. Apart from the original Portuguese settlers, others who have settled in Brazil and significantly influenced its culture include Germans (mainly in the southern states), Italians and Japanese (mainly in the state of São Paulo). In the larger cities, there are many other smaller ethnic communities representing most nationalities. There are also some sparse indigenous tribes in the Amazonian regions. POPULATION By AGE GROUP About 42% of the population is under 20 years of age and less than 7% is over 65. The average life expectancy is 69 years. A significantly young population Age profile % of total population 1998 2003 2008 (f) Trend 0 – 14 years 29.3 26.6 24.5 â 15 – 64 years 65.5 67.6 68.9 á Over 65 years 5.2 5.8 6.6 á Source: EIU, July 2006 7 2006/2007 FROM SÃO PAULO TO SHANGHAI New consumer dynamics: the impact on modern retailing* Brazil URBANISATION OF THE POPULATION A polarized urban population More than 80% of the population in Brazil is urban and approximately 30% live in the ten principal metropolitan areas. The metropolitan areas of São Paulo and Rio de Janeiro have populations of around 19 million and 12 million, respectively. Some 14 other metropolitan areas have populations of more than 1 million. The population growth is fairly evenly spread over all regions, but the North and Centrewest are expected to grow at faster rates. Urban/Rural split % of total...
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