Cigarette in Brazil: evolution of taxation, production, consumption and smuggling

Mario Antonio Margarido, Pery Francisco Assis Shikida, Matheus Lazzari Nicola and Daniel Kiyoyudi Komesu

Quaestum, 2024, vol. 5

Abstract: The objective of this study was to analyze the federal tax landscape in the Brazilian cigarette market; the production and apparent consumption of cigarettes in Brazil; the evolution of tax revenue from cigarettes in the country; and the legal and illegal/smuggling markets. As methodological procedures, based on data from Intelligence in Research, Strategic Consulting (IPEC) and the National Forum Against Piracy and Illegality (FNCP), the trends of these variables over time were analyzed. As a result, it was demonstrated that the strategy of increasing cigarette prices through taxation and minimum price policies contributed to the massive entry of smuggled cigarettes into the country. The reality of cigarette smuggling and its seizures not only showed this, but also reinforced that security forces were indispensable in this fight, although not sufficient. Therefore, cigarette smuggling could be combated both from the demand side (reducing the demand for smuggled cigarettes) and from the supply side (preventing the entry of smuggled cigarettes into the market).

Keywords: Financial; Economics (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ags:quaest:392472

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