| User scenario | |
|---|---|
| Selective Tax (ad valorem) | 90% |
| Selective Tax (specific - BRL per pack) |
4 |
| Specific component (share of the ST) | 65.95% |
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 |
179.92 | 127.98 (-28.87) |
| Average Prevalence |
12.39% | 11.32% (-8.57) |
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) | 1001.97 | 1083.09 (8.10) |
| IPI (Baseline)/ST (Scenarios) | 415.25 | 776.15 |
| PIS/COFINS (Baseline)/CBS (Scenarios) | 159.45 | 102.27 |
| ICMS (Baseline)/IBS (Scenarios) | 427.27 | 204.66 |
Cheaper brands
| Baseline | User scenario | |
|---|---|---|
| Price of the cheaper brands | 6.81 | 9.48 (39.34) |
| Total consumption | 124.52 | 88.04 (-29.30) |
| Tax revenue (month) | 621.88 | 682.40 |
| IPI (Baseline)/ST (Scenarios) | 273.71 | 495.22 |
| PIS/COFINS (Baseline)/CBS (Scenarios) | 95.34 | 62.37 |
| ICMS (Baseline)/IBS (Scenarios) | 252.83 | 124.81 |
| Tax burden | 72.61% | 80.31% (10.61) |
| IPI (Baseline)/ST (Scenarios) | 32.04% | 58.43% |
| PIS/COFINS (Baseline)/CBS (Scenarios) | 10.97% | 7.29% |
| ICMS (Baseline)/IBS (Scenarios) | 29.59% | 14.59% |
Premium brands
| Baseline | User scenario | |
|---|---|---|
| Price of the premium brands | 10.96 | 14.27 (30.16) |
| Total consumption | 55.40 | 39.94 (-27.90) |
| Tax revenue (month) | 380.09 | 400.69 |
| IPI (Baseline)/ST (Scenarios) | 141.54 | 280.93 |
| PIS/COFINS (Baseline)/CBS (Scenarios) | 64.11 | 39.90 |
| ICMS (Baseline)/IBS (Scenarios) | 174.44 | 79.85 |
| Tax burden | 64.26% | 72.56% (12.93) |
| IPI (Baseline)/ST (Scenarios) | 23.69% | 50.69% |
| PIS/COFINS (Baseline)/CBS (Scenarios) | 10.97% | 7.29% |
| ICMS (Baseline)/IBS (Scenarios) | 29.59% | 14.59% |
Illicit brands
| Baseline | User scenario | |
|---|---|---|
| Price category 1 - Illicit brands | 4.40 | 0.00 |
| Total consumption | 208.12 | 0.00 (0.00%) |
| As result of the PC2 price increase | 0.00% | |
| As result of the switching down | 0.00% |
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
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