Taxes are taking a bigger bite out of what you eat than you do!

Did you know that there are no less than six different taxes on the food you buy? That’s right PIS, Cofins, IPI, ICMS, Finsocial (God only knows what that is!) and you actually pay the income tax on the profit the producer makes, believe it or not. Some products have a tax load of over 50% and if you take an average of all of the foods you purchase it works out to 22.5% according to the Instituto Brasileiro de Planejamento Tributário (IBPT). Worse still is the fact that these taxes are built into the shelf price, retailers are not required to inform the customer what the tax rate is on each item and there are few sources where the consumer can find out. The tax on foodstuffs is higher here in Brazil than almost  every other country in the world. In the USA for example 0.7% of your food bill is tax and in Europe it’s 5% considerably less than here. The taxes on non-food items you buy at the supermarket is higher still. A proposed Amendment to the Brazilian Constitution (PEC 491/10) that was put forward in 2010 which would prohibit taxing food and medicines for human consumption died a premature death (just one more unsolved murder in Brazil).

So as it stands now you pay up to about 28% on what you earn and another 22.5% on what you spend on food, more still on everything else you buy and all the services and utilities you use. It is a good thing that the TAX CLOCK in downtown São Paulo is digital. If it were a traditional analog clock at the rate it is churning along the wind generated by the spinning hands would be above hurricane force.

Here are some sobering facts:

Chocolate drink powder 38.6%, sugar 32.33%, water 37.88%, mineral water 43.91%, rice 17.4%, potatoes 11.22%, cookies 37.30%, cachaça  81,87%, coffee 19.98%, shrimp 33.29%, beef 17.47%, chicken eggs 20.59%,turkey & ham 29.32%, chocolate 38.6%, wheat flour 17.34%, beans 17.24%, yeast 38.48%, milk 18.65%, milk powder 28.17%, butter 36.01%, tomato sauce 26.05%, vegetable oil 26.05%, French bread rolls 16.86%, fish 34.48%, juice/drink mixes 36.30%, soft drinks (can) 45.80% (bottle) 43.91%, juice (ready to drink) 36.21%, wine 54.73%, whisky 61.22%.

But wait! If you think that you’ve had enough and you are just going to eat out from now on… don’t forget that the tax built into restaurant meals is 32.31% so you can’t win no matter how hard you try.