Brazil’s tax auditors’ two-month long strike creating ‘significant’ impact – trade group

SAO PAULO (ICIS)–The two-month strike by workers at Brazil’s federal revenue is causing “significant impacts” on national and foreign trade, with small medium-sized transport operators the most affected, according to a trade group for cargo firms in Sao Paulo state.

The Union of Cargo Transport Companies of Sao Paulo and Region (SETCESP) added that the strike has also caused losses in tax collection estimated at Brazilian reais (R) 15 million ($2.6 million).

Sao Paulo state is home to the Port of Santos, Latin America’s largest, a key point for trade of some chemicals and a wide range of industrial goods, as well as of the fertilizers that are paramount to feed Brazil’s powerful agricultural sector.

LONG RUNNING DISPUTE
The trade union representing tax auditors, the National Association of Federal Revenue Auditors of Brazil (ANFIP), has for months been at odds with Brazil’s government of Luiz Inacio Lula da Silva, demanding better conditions.

Intermittent strikes started in mid-2024. As well as salary demands, the trade union is also asking for better working conditions, including the maintenance and upgrades at the many ageing customs points across Brazil’s wide geography.

As talks have not borne any fruit, the union doubled down earlier in February, announcing two weeks of so-called “zero clearance period” starting on 12 February, meaning no physical inspections will be performed during this period.

SETCESP said the long running strike is already causing havoc among Sao Paulo’s transport companies, in the most industrious of Brazil’s states.

“Since November 2024, there are delays in the release of export and import cargo, increasing the average time from one day to up to three weeks. The main impacts are linked to the country’s economy, losses to industry, service sectors and end consumers, in addition to the imminent risk of damage to stored products,” said the transport trade group.

“For transport companies, vehicles and drivers are stuck in huge queues waiting to be loaded and unloaded, representing a significant increase in their costs. Small- and medium-sized carriers are the most affected, as their cash flow depends on the punctuality of receipt of goods by the final recipient.”

SETCESP forecast the situation is “likely to worsen further” when the effects of the “zero clearance period” started on 12 February start to show.

JUDICIAL INTERVENTION
In a letter to customers seen by ICIS, logistics company Unishipping said earlier in February the “zero clearance period” should affect cargoes which demand physical inspections only, reassuring them most of the cargo clearance is automatically performed via electronic system.

“Brazil’s Superior Courts have ruled that industrial action cannot entirely paralyze essential public services (as perishable cargoes). Judicial intervention may be necessary to ensure the continuity of critical operations on a case-by-case basis,” added the letter.

Government and union re-started talks last week, although the union was not too upbeat about a prompt resolution to the conflict, adding that most of the demands presented in 2024 remained unresolved, and therefore they would feature again in contacts with the government.

“Even though [salary] negotiations have been opened for the public service, the Tax Auditors of the Brazilian Federal Revenue Service have not received a salary adjustment, due to the non-compliance with the agreement made with the sector last year,” said ANFIP.

“ANFIP is now seeking the government to set up specific and temporary tables to resolve the issue.”

Additional reporting by Bruno Menini and Sylvia Traganida