5x more expensive

So, a number of countries, including Brazil, have VAT, which is considerably higher than US sales tax. Looking online, it looks like Brazil has 17%-19% VAT, and sales tax in the US, aside from a few states that don’t have it, is usually in the 6%-9% range.

And I can believe that for some products, maybe localization for Portuguese costs something, and economy of scale is less.

But how can it possibly be 5x? That seems far higher than anything that I could imagine producing. Some countries have protective tariffs to subsidize local industry, but I’m pretty sure that Brazil isn’t big in the PC hardware business.

googles

Okay, this is a decade old. They cite other taxes as some of that:

https://thenextweb.com/news/from-brazil-cost-brazil-profit-why-electronics-expensive-Brazil

Taxation is a recurring theme when you ask Brazilians about the cost of many imported goods. To take an example, the Brazilian website iG published an infographic on Apple products’ tax burden, and noted that the different taxes hitting the iPad add up to almost 55%.

So, that’s pretty hefty. Still not 400%, though.

This is where ‘Lucro Brasil’ (“Profit Brazil”) comes into play. Coined in reference to ‘Custo Brasil,’ it denounces the fact that structural problems often hide abusive margins at all levels, which most Brazilian consumers aren’t aware of.

While it is always difficult to find out about distributors’ and manufacturers’ margins, several details seem to confirm this suspicion. For instance, 60% taxes don’t fully explain why items can be twice as expensive in Brazil, and why tax breaks take so long to be reflected, Gizmodo Brasil highlighted in a recent article.

Okay, but why higher margins?

According to many analysts, the Brazilian elite may have its share of responsibility here. In practical terms, a high price tag has become a selling point for some, the anthropologist Roberto da Matta explained in an interview:

“When I was living in the US, I was running once when I saw then president George W. Bush, running as well, with security guards. He was using the same Nike shoes as I was. Here in Brazil, it’s hard to picture such a scene. Because objects still very much reflect the social segment of their owners. The sneakers, the car, the restaurant aren’t valued only for what they are, but also as status symbols. This is why it is more expensive to have dinner in Rio or São Paulo than in New York.”

I could maybe buy that for luxury goods – that’s a thing, Veblen goods, but I don’t think that most computer hardware probably qualifies.

Martin’s comment is a reference to reports that Foxconn is now manufacturing Apple products in its Brazilian plants – a piece of news that didn’t have any major impact on their price tags.

Hmm. That might be an argument that protectionist policy is involved.

https://www.zdnet.com/article/brazil-is-among-the-worlds-most-expensive-countries-to-buy-an-iphone/

Brazil is among the world’s most expensive countries to buy Apple products, according to a new report looking at 20 countries worldwide, published by bank BTG Pactual.

The prices of imported electronics in Brazil are among the highest of the countries listed in the report and are justified the argument that the Latin country is a “tough environment for foreign players”, who have to deal with “challenging and structural issues.”

Such problems include high import taxes, complexities and bureaucracy for imports and bottlenecks around logistics. According to the report, that means players with local manufacturing operations will get the upper hand in the years to come.

Yeah, that’s specifically referencing imports too.