New Tax Refund System for Tourists Pioneered in Rio de Janeiro In a significant move aimed at boosting trade and tourism, Governor Claudio Castro of Rio de Janeiro has officially enacted legislation that allows for tax refunds (specifically the ICMS tax) on purchases made by foreign tourists within the state. This pioneering initiative makes Rio the first state in Brazil to implement such a system, providing a new incentive for international visitors.
Known as the “Tax-Free” program, this refund system will apply to purchases made in-person using a credit card issued outside of Brazil, exclusively at accredited retail locations. It’s important to note that the reimbursement feature excludes services and items categorized under hospitality, such as meals and beverages served in restaurants, cafes, and hotels.
While the framework for executing the Tax-Free program has been sanctioned, it still requires regulatory guidelines. As it stands, tourists will be able to claim their tax refunds via their credit card statements but must first request this reimbursement at the airport when departing Brazil. The full rollout of this tax refund initiative is anticipated by the end of 2025, following the selection of a company that will manage the operational aspects of the program through a bidding process.
Notably, such tax refund systems are already in place in neighboring countries like Argentina and Uruguay, which underscores Rio’s role as a trailblazer in Brazil. Gustavo Tutuca, the Secretary of State for Tourism, hailed the approval of this law as a “historic milestone for Rio de Janeiro.”
Enhancing Economic Impact through Increased Visitor Spending A recent study conducted by the Instituto Fecomércio de Pesquisa e Análises do Rio de Janeiro (IFEC RJ) reveals that the Tax-Free initiative holds the potential to significantly enhance visitor spending, potentially doubling the annual expenditure from $212 million to an impressive $411 million. This increase could translate into more than R$ 2 billion in additional economic activity for the state.
Surge in International Visitor Numbers as of November 2023, Rio de Janeiro recorded an impressive influx of 1,353,012 international tourists, marking a 27% increase compared to figures from the previous year. Projections suggest that this number may exceed 1.5 million by the end of December, potentially matching the historical peak reached in 2014 during the World Cup, which saw 1,590,153 foreign visitors.
Here is a summary of the top countries from which tourists are traveling to Rio de Janeiro:
1. Argentina: 400,684
2. Chile: 249,272
3.USA: 161,102
4. France: 64,957
5. Uruguay: 50,809
6. United Kingdom: 40,731
7. Portugal: 36,132
8. Germany: 34,185
9. Colombia: 32,164
10. Italy: 25,576
With the introduction of the Tax-Free program and the resulting boost in tourism, Rio de Janeiro is well-positioned to reinvigorate its economy while welcoming more international visitors.
