iPhone 4S Launches In Brazil Today With Jaw-Dropping 47% Import Tax Attached

iPhone 4S Launches In Brazil Today With Jaw-Dropping 47% Import Tax Attached

For all of the talk of Foxconn opening a factory in Brazil to churn out iPhones and iPads, here’s the big, overlooked reason that Brazilian Apple fans need their devices to be built locally: 46.76% of any Apple device’s cost in Brazil is made up of crazy import taxes.

What does that mean? Well, it’s easy to see in today’s launch of the iPhone 4S, which is going on sale in Brazil today for the equivalent of $1,830 USD for the 64GB model, compared to the $849 it would cost in the United States.

Madness. Of course, there’s reason to wait if you’re a Brazilian: the Foxconn factory in Brazil is believed to produce native iPhones as early as January, which should shave nearly 47% off the price.

  • Rob Williams

    Brazilians all come to the US to buy their products.  They routinely come to Florida a few times a year, buy 3-5 Mac books, a few iPads, and countless other things that have excessively high import taxes in the country.  The whole situation is awesome for those of us in retail in Florida, because they dump in a ton of money to the economy here.

  • hmartinsg

    Brazilians will understand…

  • PeterLin

    And, frankly, if a poor country wishes to protect its domestic manufacturing from assault by international capital, that’s their right. This is the outcome that Brazil wanted to encourage – domestic manufacture of high end goods employing Brazilian labor rather than have those jobs and profits go to companies in other countries.

  • Helder Lima

    Hahaha good idea, Henrique! 

  • volodoscope

    Yeah, I think that’s why Apple will build some iPhones in Brazil.

  • Mike Rathjen

    Don’t pretend it’s all roses.

    I know a Brazilian and he says the largest effect by far is that everything foreign is either expensive or completely unavailable. Brazil isn’t a large and free enough market for most companies to make a local manufacturing base. Often there are no local alternatives.

    Mostly the middle class and small businesses suffer. The government has exempted themselves of course. The rich don’t mind because they can pay it. The poor can’t afford imports even without the tax. Imagine the chilling effect on starting new businesses if a initial capital costs are nearly 50% higher than they would otherwise.

    Taxes at that high of a rate also ensure a high rate of noncompliance. There is a tremendously huge black market, which puts money into the hands of organized crime and turns common people into criminal tax evaders. Anyone near a border or with the ability to travel will buy everything outside the country and fail to declare it coming back in. All of these black and grey market purchases provide 0% tax revenue.

    Not to mention, high import tariffs tend to cause trade wars with matching tariffs by other countries. If you trade with Brazil and your imports are taxes at 50%, you tend to do likewise to their imports into your country. So Brazilian exports are crushed the same way their imports are.

  • Mike Rathjen

    It’s okay though because high taxes ensure that the poor don’t have to live in terrible slum-like conditions… oh wait…

  • JoshObra

    o_O; 47%?

    And I thought taxes in California was high.

  • Márcio Souza

    Here in Brazil, we have the most expensive iPhone 4S the world. Apple, we aren`t clowns.

  • mduncanvm

    I went to the store to buy an iPhone 4S 16Gb. The price for an unlocked phone and without a contract was R$2049 ($1100). With the lowest monthly contract you can get it was still R$1689 ($908). I did not buy it today. Maybe early next year. Crazy!

  • fernandokreutz

    We don’t “fail” to declare the product and pay 60% of taxes… we do it in purpose!

  • Sean Smith

    Apple isn’t setting the price that high. As the article states, it’s because Brazil is imposing an absolutely ridiculous import tax of 47% on the iPhone 4S.

  • Douglas Drumond

    849 * 1.47 = 1248.03. These are taxes, where does US$580 come from? Apple is setting the price a little high.

  • FenTiger

    Ask the Greeks about not paying tax and what a mess it gets you in to. No wonder Brazil excels at slums, poverty and social inequality. And football. 

  • fernandokreutz

    no need to worry, we pay a lot of tax on other stuff, like cars, food, gas, etc. Just to give you an idea, cars here have about 45% tax, even those manufactured here.

  • Pedro Gama

    It’s a good post but sorry, it’s dont reflect the entire truth.Yes, Brazilian taxes are high, and yes, things here is more expensive.But no, Apples iPhone prices so high is not only because taxes.
     
    To understand all you need to do is a single mathematics, this way.
    How much a unlocked 64gb iPhone in USA? = US$ 849,00
    Plus this so called 47% taxes = R$ 1.248,00
    And I am talkink about a final price taxed, that is not the case, as an country taxes it’s fabric price. But no problem, we can live with an 47% tax on it’s final price.
    So, the Brazilian price has nothing related about this 47% import tax.
     
    To prove my point, here are some FACTS:
    Mac Book Air here is almost the same price, +/- US$ 1.800,00
    iMac 21″ is almost the same price too,
    you can buy not 1, but TWO iPad 2 for the same price,
    and all this prices are from Brazilian Apple Store online, and divided in 12  months with free shipping. So just think, Brazilian high taxes are not only to mobile phones, are for all eletronic products. Where is the logical for this abuse so? There is no logical, it’s all a matter of a VERY bad commercial act.
     
    about iPhone 4S? We have FOUR mobile companies, OI, TIM, VIVO and CLARO that sells iPhone 4S for less than US$ 1.000,00 and NO!!! I am not talking about phones with hight contract plans, I am talking about iPhones WITHOUT plans. iPhones with pos paid contracts. The “jailed” planned iPhone 4S can be found for even less than US$ 600,00 (That still a lot expensive as it’s in a “jailed” plan)
     
    Here is the REAL truth, and that will be proved soon… “Someone” hired a very bad regional director for Apple in Brazil, a very “greed” one (to be light), that understand abslutelly NOTHING about Brazil, and a lot less about marketing, as all he is doing is put Apple’s name in the Black book here, and for what? For nothing… This person just thinks that, as in Brazil taxes are hight, He could use it to, with this abuse, improve Brazilians Apple proffit, so, puting his name on the top of the company. It’s just a contabil error that wil certainlly put his neck on the hope very soon (and we all Will be very happy with this). This lame person is using a nation fact, high taxes, to abuse. THAT’S the true.
     
    It’s really a pitty, but that’s our reallity now, just because someone choose the wrong name to “drive” Apple in Brazil, the company name will win a shame spot that will be very hard to clean in a small ammount of time. Here, this greed way of act, is faced as an ofense, puting companies products acessible only by corrupts and thieves. I doubt that people will face Apple products as “Prada”, “Porshce Designe”, “Gautier” etc etc etc
     
    Carry an iPhone 4S will be for sure something that will mark with shame it’s owner.
     
    Today a 2 way trip to Miami, FL, from Rio de Janeiro is about US$ 900,00. We will certainlly prefer a new trip to buy our iPhones (and other goodies), instead of being ABUSED by Apple Brazil and his irresponsable director.
     
    We are really missing the times that Brazil had no Apple products to buy directly. In that time, we could buy it without a clown nose as happens now.
     
    By the way… that famous quote of Steve that “Everyone will have an Mac” goes to the grave too? Not everyone will can, if things goes in this infamous way.
     
    Best wishes for all,
     
    Pedro Gama (For those who cares about what we think here)
     
    P.S. Our joke of the day is: “iPhone 4S price in Brazil is so high because here iPhone cames with a new Apple program… THE iClown Nose”

  • fourdemocracy

    Apple started in America but doesn’t want to pay taxes or give back.  A tariff to re-enter the US market would be only fair.  It is a corporation owned by shareholders, workers, the community, and consumers. We made it great and Steve Jobs gave China our technology for his wealth.  It is only fair we tax them.  

About the author

John BrownleeJohn Brownlee is a Contributing Editor. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his wife and two parakeets. You can follow him here on Twitter.

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