| TAX BURDEN | ||
|---|---|---|
| Baseline | User scenario | |
| Tax burden (revenues in term of cigs value) | ||
| IPI (Baseline)/ST (Scenarios) | ||
| PIS/COFINS (Baseline)/CBS (Scenarios) | ||
| ICMS (Baseline)/IBS (Scenarios) | ||
| Maximum tax per State PC2 (Mato Grosso) | ||
| Maximum tax per State PC3 (Mato Grosso) | ||
| Total | ||
| Tax burden (in terms of retail price) | ||
| PC2 | ||
| PC3 | ||
| Avg | ||
| Tax burden (revenues in term of GDP) | ||
| Total | ||
| User scenario | |
|---|---|
| Selective Tax (ad valorem) | - |
| Selective Tax (specific - BRL per pack) |
- |
| Specific component (share of the ST) | - |
Brazil's tobacco use reduction goal
The goal of the Plano Nacional de DANT is to achieve a 40% reduction in tobacco use prevalence by 2030. A Selective Tax on tobacco products that effectively reduces consumption by at least 30% will significantly contribute to reaching the targeted reduction in prevalence.
| Baseline | User scenario | |
|---|---|---|
| Total consumption |
- | - (-) |
| Average Prevalence |
- | - (-) |
The scenarios assume relatively high cigarette price elasticities (in absolute terms), arriving at optimistic outcomes on consumption and conservative outcomes on revenues.
| Baseline | User scenario | |
|---|---|---|
| Total tax revenue (month) | - | - (-) |
| IPI (Baseline)/ST (Scenarios) | - | - |
| PIS/COFINS (Baseline)/CBS (Scenarios) | - | - |
| ICMS (Baseline)/IBS (Scenarios) | - | - |
Cheaper brands
| Baseline | User scenario | |
|---|---|---|
| Price of the cheaper brands | - | - (-) |
| Total consumption | - | - (-) |
| Tax revenue (month) | - | - |
| IPI (Baseline)/ST (Scenarios) | - | - |
| PIS/COFINS (Baseline)/CBS (Scenarios) | - | - |
| ICMS (Baseline)/IBS (Scenarios) | - | - |
| Tax burden | - | - (-) |
| IPI (Baseline)/ST (Scenarios) | - | - |
| PIS/COFINS (Baseline)/CBS (Scenarios) | - | - |
| ICMS (Baseline)/IBS (Scenarios) | - | - |
Premium brands
| Baseline | User scenario | |
|---|---|---|
| Price of the premium brands | - | - (-) |
| Total consumption | - | - (-) |
| Tax revenue (month) | - | - |
| IPI (Baseline)/ST (Scenarios) | - | - |
| PIS/COFINS (Baseline)/CBS (Scenarios) | - | - |
| ICMS (Baseline)/IBS (Scenarios) | - | - |
| Tax burden | - | - (-) |
| IPI (Baseline)/ST (Scenarios) | - | - |
| PIS/COFINS (Baseline)/CBS (Scenarios) | - | - |
| ICMS (Baseline)/IBS (Scenarios) | - | - |
Illicit brands
| Baseline | User scenario | |
|---|---|---|
| Price category 1 - Illicit brands | - | - |
| Total consumption | - | - (-) |
| As result of the PC2 price increase | - | |
| As result of the switching down | - |
Impact on disease incidence, number of avoided cases, cumulative 2025-2050
| User scenario | |
|---|---|
| LRI | 779.709 |
| MSDs | 652.066 |
| CVDs | 24.291 |
| Cancers (Related) | 4.871 |
| Cancers Others | 15.612 |
| COPD | 67.719 |
| Diabetes | 4.613 |
| Dementia | 1.534 |
| TOTAL | 1.550.416 |
Notes: LRIs = lower respiratory infections; MSDs = musculoskeletal diseases; CVDs = cardiovascular diseases; Cancers (related) = lung, esophageal, nasopharynx, larynx, oropharynx, lip and oral cancers; Other cancers = colorectum, breast, stomach, liver, pancreas, prostate, cervix and uterus, melanoma cancers; COPD = Chronic obstructive pulmonary disease.
Impact on FTEs (full time equivalent) in the working age population, per year
| User scenario | |
|---|---|
| FTEEmployment | 4587 |
| Absenteeism | 1446 |
| Presenteeism | 1917 |
| EarlyRetirement | -104 |
Interpretation: Every year, Brazil would expect to gain nearly XX FTEs, with the largest contributor being from increased employment.
Notes: Annual gains in FTEs per year. Absenteeism, presenteeism, and early retirement are actually decreasing; they are shown as positive values because their reduction has a positive economic impact.
Change in prevalence, in percentage of baseline, compared to baseline
Interpretation: The proposed scenario would result in a drop in smoking prevalence of XX percent by 2050.
Notes: The prevalence of smoking in Brazil is about 13% in 2025. The results are always compared to baseline.
Cumulative impact of tax scenarios on health expenditure savings, discounted at 3%
Interpretation: By 2050, cumulative savings in health expenditure could reach BRL XX million under the scenario.
Notes: Savings are discounted at 3%. Monetary values are expressed in 2024 prices. Health expenditure includes both public health and out-of-pocket expenditure.
Impact on Brazil's GDP
Interpretation: By year 2050, Brazil's GDP would be XX% higher compared to a no intervention scenario, due to increased workforce productivity (from higher employment rate, less absenteeism and presenteeism and larger population derived from reduced tobacco-attributable diseases and deaths).
Methodology and references:
- Divino, J. A., Candido, O., Ehrl, P. Valadão, M., Rodriguez-Iglesias, G. (2025). The aftermath of the tobacco tax reform in Brazil (Economics for Health Working Paper No.25/4/2). Economics for Health
- Divino, J. A., Candido, O., Ehrl, P. Valadão, M., Rodriguez-Iglesias, G. (2025). The aftermath of the tobacco tax reform in Brazil (Economics for Health Policy Brief Dec. 2024). Economics for Health
- Masmontserrat, M. & Brys, B. (2025) User guidance on the UCB Tobacco Tax Simulator
Notes:
The Universidade Católica de Brasília (UCB) Tobacco Tax Simulator was developed on the basis of analytical work carried out by the Organisation for Economic Co-operation and Development (OECD), Economics for Health at John Hopkins University's (JHU) Bloomberg School of Public Health, and the Universidade Católica de Brasília (UCB), in the context of the Bloomberg Philanthropies' Initiative to Reduce Tobacco Use.
The output on health outcomes, healthcare expenditure, and productivity of the UCB Tobacco Tax Simulator builds on a methodology developed and owned by the OECD. The content of this tool, and projections resulting thereof, are indicative by nature and should not be reported as representing the views of Member countries of the OECD, the OECD Secretariat, JHU, UCB or the Bloomberg Philanthropies.
Use of the UCB Tobacco Tax Simulator is the sole responsibility of the user. Under no circumstances shall UCB, JHU, the OECD or Bloomberg Philanthropies be liable for any loss, damage, liability or expense suffered which is claimed to result from use of the tool.