Revision of the IPC should raise prices of cosmetics to consumers in 15%

Some distributors and wholesalers of the cosmetics sector must increase the price of certain products by at least 15 percent, later this month. The action will be in function of price pressure brought by the change in the legislation procedure for charging the tax on industrialized products (IPI), which went into effect this month in the cosmetics sector.
According to the Decree 8,393, in annex III to the Law of 1989 7,798, which included cosmetics industry products with IPI rate greater than 15%, the Distributor and wholesaler to own a relationship of interdependence, interconnection, coalition or control with the manufacturers will be equated with industrial plant.
Practice makes IPI taxpayer the Distributor and wholesaler to sell the products referred to in annex III. The new amendment was approved at the beginning of the year, but only began to take effect this month. With that, major cosmetic brands that have manufacturing operations and distribution of products will be affected, as Hypermarcas, Avon, Natura, Unilever and Ikesaki, for example.
To President of Associação Brasileira da Indústria and personal hygiene, perfumery and cosmetics, Joao Carlos Basilio, in the quest to balance the budget, the federal Government published the Decree without a prior analysis of the sector and also did not seek the authority to talk about it. "With this amendment shall be the incidence of the IPI on market access activities, and not just about the industrialization of products," said Basilio to DCI.
Aggravating
According to the lawyer of one of the largest companies in the country's beauty, who spoke on condition of anonymity, the effect of the new tax will also affect other sectors of the economy of the country, whereas many products that have received the new tax rate are inputs used in the provision of services in beauty salons and aesthetic. "The price for the final consumer will rise, since companies that collected the IPI shall from now on to collect them. The professionals will not be able to cope with this increase, "commented.

According to the lawyer, for now it is not possible to calculate the adjustment, but he must stay above 15%. The new collection will cause a ripple effect in the storeroom, as is the case of the tax on Circulation of goods and services (ICMS), which appears in all the steps of the production chain.
For him, the size of the country and the need of companies to meet the entire demand forced companies to invest in the process of distribution of their products at the national level.
Of similar opinion shares the commercial consultant Bio Extratus, Gessy Alves de Oliveira. "The measures announced by the Government will affect the economic performance of the sector."
To the President of the Association of Distributors and wholesalers of processed products do Estado de São Paulo (Adasp), Sandoval de Araújo, the impact of the new tax should not affect sales and the adjustment value must not exceed 12%. He also says that other taxes must be included in the list going forward. One of the companies that have been affected with the new measure is Universal Cosmetics, which operates in São Paulo and in the greater São Paulo. For the owner, the company, Rosefranci Sunday the impact was great. "We will have a pass-through for some products of more than 20%."