Note that there is still no tax on ADRs. I couldn't resist and bought some more around at $71.50 after asking my broker to check this 2% tax issue. He told me that State Street said that there is no 2% tax on ADRs or ETFs. This tax applies only to direct investors buying in Brazil.
So EWZ is now actually MORE attractive as a Brazil play than ever before.
Exactly. People who want to invest in Brazil have to buy from you, rather than buying on the Bovespa, otherwise they will get hammered with a 2% tax. In theory, your ADRs/ETFs should sell at a 2% premium wrt to Bovespa shares.