ArtRio opens amid debate on Brazil's import taxes

RIO DE JANEIRO (AP) — Gallery owner Renato Gouvea Jr. stares at a wall full of art and laments what's missing.

Sure, his exhibition at ArtRio, which opened this week and is now among the world's top art fairs, is respectable. There are paintings from masters such as Chagall and Brazilian Di Cavalcanti. But Gouvea is more ambitious.

Holding him and other Brazilian collectors back are taxes, he says. The wealthy connoisseurs flocking to the Rio show are complaining about steep import tariffs on fine art that can almost double the price of pieces bought abroad, leading many collectors to simply leave their top works outside the country.

"A friend bought a (John) Chamberlain sculpture for $400,000 at the latest Basel show in Europe and couldn't wait to bring this cool piece back to Brazil," said Gouvea, an owner of the Arte57 gallery in Sao Paulo. "Then he found out what the import taxes would be. Today, that sculpture sits in a home he has in the U.S."

Lowering art taxes for super-rich collectors doesn't rank high on the government's list of priorities, especially following recent nationwide protests over the woeful state of public hospitals, schools and infrastructure average Brazilians get in return for sky-high income tax rates.

But proponents of lowering the tariffs say it's not just an issue for the wealthy, but for all art lovers of more modest means. That's because far fewer of the world's best works are getting into Brazilian museums. Museums worldwide rely on loans from private collectors, loans especially important in nations like Brazil, where a culture of charitable support for the arts is virtually unknown and government investment lacking.

"There is absolutely zero benefit for anyone from this very antiquated system we have in place," said Brenda Valansi, the Brazilian founder and director of ArtRio, who has made lowering the import tariffs a personal crusade. "Artists don't benefit, collectors don't benefit, the state doesn't even really benefit and the Brazilian public certainly doesn't."

Valansi met with Brazil's Culture Minister Marta Suplicy in March to argue against Brazil's taxes, which are also notoriously high for other imported goods.

At the ArtRio show, where the art is for sale but is also a massively popular exhibition for the non-buying public at large, Valansi is working to draw support from among world-class art dealers and billionaire collectors for help in persuading the government to lower combined federal, state and even municipal taxes that can add 50 to 70 percent to a piece's sales price. Import duties for art in the U.S. and most other countries range from 7 to 10 percent.

The taxes are a major worry for the 105 galleries from 14 countries participating at this year ArtRio, including London's White Cube, New York's David Zwirner and Galeria Cardi of Milan in hopes of tapping into a potentially lucrative market. The five-day show opened Thursday to the general public.

Imported art isn't the only sector that protectionist Brazil taxes heavily in an effort to stimulate and protect homegrown markets. The World Bank ranks Brazil's tax system as 156th globally in ease of payments and their burden. A medium-sized Brazilian business spends 2,600 hours each year just figuring out what it owes, almost three times as many hours spent in the next most inefficient nation, Bolivia, the bank said.

"I have never seen such high import taxes anywhere in the world," said Victoria Gelfand-Magalhaes, director of the Gagosian gallery's New York branch, who labeled the tariffs as "medieval." She was in Brazil to oversee the gallery's booth at ArtRio for the second subsequent year. "It really makes it prohibitive for people here to buy international art."

Gelfand-Magalhaes said it's unlikely her gallery will open a permanent presence in Brazil under the current tax regime.

White Cube opened one in Sao Paulo late last year despite the tax issue. But the London gallery's director of exhibitions, Tim Marlow, said the space is more about introducing White Cube's artists to the Brazilian public than immediately turning a profit.

"We have a lot of artists who just want to be there in Sao Paulo," he said. "If we can't place their work with Brazilian collectors, we'll place it elsewhere."

Under a deal hammered out in a committee representing Brazil's 27 states, some buyers at ArtRio and Sao Paulo's SP Arte fair are exempt from state import taxes, but federal duties still apply. With the exemption, import duties fall to around 15 percent, depending on the medium.

But only Rio and Sao Paolo residents are eligible for the tax relief and the art fairs have to fight every year to win the federal tax exemption because it's not automatically renewed.

Glenn Scott Wright, director of the Victoria Miro gallery that has an exhibit at ArtRio, said he's seen many potential Brazilian buyers leave his London-based gallery empty-handed because of the tariffs.

"Foreign galleries want to do business here," he said, "but the fiscal system has this mysterious and convoluted tax system that makes it hard for the world to do business in Brazil, and hard for Brazilians to interact with the outside art world."

___

ArtRio is open to the public Sept. 5-8

___

Jenny Barchfield on Twitter: www.twitter.com/jennybarchfield

Bradley Brooks on Twitter: www.twitter.com/bradleybrooks

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Nonviolent disciplining of kids pushed

    Child rights advocates called on senators to pass and strongly endorse a law that will institutionalize positive and nonviolent methods of disciplining children.The Child Rights Network (CRN), Plan International Philippines (PIP), Philippine Legislators’ Committee on Population and Development (PLPCD), and Lihok Pilipinas Foundation led the call for the enactment of the Positive Discipline Bill.Several Quezon City Council members led by Majority Floor Leader Jesus Manuel Suntay, Victor Ferrer …

  • Method to their madness

    [caption id="attachment_256768" align="alignright" width="212"] Illustration by Rod Cañalita[/caption] EMMANUEL PORTUGAL Country Manager for the Philippines, VMware I look after the garden. I’d like to think that I have a green thumb—no plants have died so far! The ones I like now that I planted a few months ago is the Blue Iris. Like the town in the movie, my Blue Iris shows up in the morning and only appears for one day. …

  • JGFP Summer Tour on today

    The summer tour for local junior golfers kicks off with the holding of the ICTSI-JGFP Baguio Junior Open today and tomorrow at the treacherous Baguio Country Club course in Baguio.Sixty players aged 6 to 17 years old are entered in the 36-hole tourney serving as the opening leg of the summer circuit organized by the Junior Golf Foundation of the Philippines with the International Container Terminal Services, Inc. Foundation as main sponsor. ... …

  • PH now market ready to absorb infra bonds

    The Philippine market is now ready to absorb infrastructure bonds that will be issued by private companies amid a growing pipeline of infra-related projects under the government’s Public-Private Partnership (PPP) program. President Benigno Aquino III last week said the government is still committed to spend more on the country’s infrastructure, with 16 PPP projects currently on the pipeline and nine that have already been awarded. Over the years, some of the country’s biggest infrastructure …

  • Filipinos are saving more – BSP survey

    More Filipinos have the extra cash to save for that proverbial rainy day, according to the Bangko Sentral ng Philippines (BSP). Based on a quarterly survey on consumer confidence, domestic households with savings have the means to increase family reserves and to bring up the amount to historical highs. The central bank said improved family income, a generally positive outlook on the economy, inflation and foreign exchange rates encouraged saving behavior during the first three months of 2015. …

  • AXA Philippines growing alongside its parent firm

    Philippine AXA Life Insurance Corp. is growing side by side with its parent firm, global insurance firm AXA, after posting significant growth in its total premium income amid an increasing market share in the country. A statement showed that in the Philippines, multi-billion firm AXA Group saw P18.35 billion in total premium income. The local entity of AXA, AXA Philippines is a joint venture between AXA Group and the Metrobank Group. In 2014, it saw an increase in market share to 11.6 …

  • End to traffic jam in sight? Japan to lend P4B to PHL for road projects

    The Japanese government will be providing some P4 billion to the Philippines for road projects aimed at decongesting monstrous jams in Metro Manila.Noriaki Niwa, chief representative of the Japan International Cooperation Agency (JICA), said the loan will cover major interchanges to address traffic congestion in Metro Manila, including flyovers, and road links.Among them are the interchanges on EDSA-Roosevelt/Congressional, EDSA-West/North, and C-5-Green Meadows and North/Mindanao Avenue. ... …

  • US won’t provide flexibility for countries interested in TPP

    Washington D.C.—The US government will not provide any flexibility for potential member countries, like the Philippines, in their bid to become part of the Trans-Pacific Partnership (TPP), a senior official said. Economic and Business Affairs Deputy Assistant Secretary William E. Craft, Jr., said all restrictions stated under the TPP trade deal will be maintained and have to be met by the current and future member countries. Earlier, the Department of Trade and Industry (DTI) said that the …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options