Brazilian bill increasing taxes on non-essential products excludes pet food

Pet food will not be deemed a “superfluous” product in Brazil’s second-most populous state, Minas Gerais, thanks to the intervention of the Brazilian Association of Pet Products Industry (ABINPET).

Bill 1295/23 aims to increase the ICMS (Tax on Circulation of Goods and Services) by 2% for non-essential products. This includes alcoholic beverages, cigarettes, soft drinks, perfumes, smartphones, cameras and, initially, pet food.

ABINPET’s lobbying successfully established the importance of pet food for the health and well-being of animals, as well as the impact that a price increase could have on homes across the state.

“With the articulation of ABINPET with some state deputies and NGOs, we were able to remove pet food from this list of superfluous products, as well as establish in law the essentiality of pet food,” says a spokesperson of the industry association.

Tax burden

ABINPET’s CEO José Edson Galvão de França explains that 3 taxes—IPI (tax on industrialized products), PIS (Social Integration Program) or COFINS (Contribution to the Financing of Social Security)—are already levied along with the ICMS on pet food, increasing its final product value by 50%.

“The bill discussed in the State of Minas Gerais intended to increase the ICMS by 2%, which would imply a tax burden of approximately 25%,” de França says.

He added, “The general understanding for the Brazilian Federal Revenue Service is still that pet food is a superfluous product, even if statistically, today there are two pets for each household in Brazil.”

Legally obtaining a non-superfluous status for pet food is thus seen as a “historic achievement” for the organization, and they hope that this will serve as a “jurisprudence” for more Brazilian states to also review the definition of pet food within the tax structure.

According to predictions from the Instituto Pet Brasil (IPB), the Brazilian pet industry generated R$60.2 billion ($12.1B/€11.2B) in revenue in 2022.