Last December, we witnessed an intense mobilization to ensure that the visual arts sector was properly included in the list of operations benefiting from the differentiated regime of the Tax Reform, guaranteeing a 60% reduction in new taxes. This means that services and goods produced by artists and galleries will be subject to rates of up to 10.6%.
Undoubtedly, this was a significant victory for Coletivo 215, which brings together ABACT (Brazilian Association of Contemporary Art), AGAB (Brazilian Association of Art Galleries), the fairs SP-Arte and ArtRio, as well as independent galleries. However, many questions, advances, and mobilizations by the sector around this issue remain necessary.
“The Brazilian tax system is one of the most bureaucratic in the world. In many cases, the import of artworks is treated as if it were any other consumer good, subject to the same high tax rates, discouraging market growth without a long-term vision. There is a lack of incentives and more flexible models that would make us competitive against markets in countries that have structured a regulatory environment favorable to the development of art,” says Victoria Zuffo, president of ABACT.
What is the justification for such a high import tax on artworks in Brazil? Why doesn’t Brazil adopt models like that of the U.S., the largest art market in the world, which does not impose federal taxes on the import of works? Hong Kong, the second-largest global market, has a zero rate for artworks, and in France (the largest market in the European Union), the tax rate is only 5.5%. Why does Brazilian legislation remain so unfavorable to the development of the art system (including the market) compared to other countries that encourage cultural preservation and promote their creative industries?
“Historically, art in Brazil has been seen as a superfluous or luxury good. It is essential that the sector organizes and professionalizes itself, ensuring stronger representation and demonstrating the importance of culture for a country with such a rich and diverse artistic production,” argues Victoria.
This perception of art as a luxury good has deep historical, social, and economic roots, dating back to the colonial period, when it was associated with elites and the Catholic Church. Demystification depends on continuous effort through education, consistent cultural policies, and broader recognition of art as a right, an essential element in shaping identity and critical thinking. No society overcomes inequalities (which always involve alienation and exploitation) without embedding the appreciation of its culture in this process.
Over the years, government support for art has been unstable, with periods of incentive followed by drastic cuts. This scenario leads to dependence on private incentives or fostering laws, making art more accessible only to those who can finance it. It must be emphasized that such operations and services promote Brazilian visual artists and make it possible for the expression of our culture to be disseminated as an important international economic driver.
The main obstacle to a favorable import/export policy lies in the Brazilian tax system, which is excessively bureaucratic and complex, burdening sectors such as the arts. In the case of importing works (paintings, original prints, and sculptures), four different taxes apply, calculated on the customs value, which includes the value of the good, insurance, and shipping costs, among others. Three are federal: Import Tax, with a current rate of 3.6%; PIS, with a current rate of 2.10%; and COFINS, with a current rate of 9.65%. The ICMS, with an average rate of 18%, is state-level. As these taxes are applied cumulatively, the total tax burden can exceed 41%.
Another complication: Brazil sets criteria that determine the variation of taxes for different formats of artworks, according to the fiscal classification of the good to be imported. There is a Common External Tariff (TEC) that contains the classification of each product and the applicable rates set by the government.
To give an example of a practical obstacle: a Brazilian artist who has produced works during an artist residency program abroad would have to pay 47% in taxes to bring their works back upon returning. The logic of absurdity prevails: it is cheaper to keep the production abroad!
It seems to me that the ideal solution would be a tax reform that reduces import taxes on artworks and simplifies the calculations. In addition, it would be crucial for the government to change its perspective on the visual arts, recognizing them as a relevant component for economic development. Perhaps a more favorable approach to the arts sector could contribute to strengthening the art market in Brazil and stimulating its growth.
A report recently released by Coletivo 215 states that, according to data collected by Observatório Itaú regarding the GDP of the Cultural Economy and Creative Industries (ECIC), between 2012 and 2020, the ECIC GDP grew faster than the overall generation of wealth in Brazil. During this period, the creative segments sector advanced 78%, while the country’s total economy grew 55%.
Other relevant figures from the study point out that, in 2020, the ECIC moved R$230 billion, equivalent to 3.11% of GDP. In that same year, there were more than 130,000 cultural and creative industry companies operating in the country, and the sector accounted for 2.4% of the country’s net exports. In 2022, the sector generated 308,000 new jobs compared to 2021. There were 7.4 million formal and informal jobs in the country, equivalent to 7% of all workers in the Brazilian economy. How can these figures be disregarded? And the domestic market today accounts for only 0.89% of the global total.
Last year, ABACT conducted a sectoral survey of the art market in Brazil. In 2023, the domestic market reached a total value of approximately R$2.9 billion (USD 580 million), a 21% growth compared to the previous year. This result still remains 1.5% below the pre-pandemic level of 2019.
The Brazilian art market depends mainly on local buyers, with an average of 77% of sales to this audience. On the other hand, the 24% increase in export value in 2023 indicates a significant expansion in the foreign market. Currently, five countries account for 90% of all Brazilian art exports.
One of the most strategic and interesting ways to expand the foreign market is by attracting international galleries (and their curators) to national fairs, which serve as platforms for promoting Brazilian art. By participating, gallerists and agents have the opportunity to get to know national production, which is of the highest quality, and to represent it in their countries. Therefore, the entry of foreign galleries into the domestic market should not be seen as increased competition but as an important driver of the national market. For this to happen, it is necessary to reconsider the reduction of ICMS at Brazilian art fairs. After all, who would benefit from the country’s cultural isolation?