The Government Willingness to Legislate Tobacco Control and Government Income From Tobacco Taxes in Brazil

Abstract

Background and context: The government willingness to legislate tobacco control, as part of the complex tobacco landscape developed by the Initiative on the Study and Implementation of Systems (ISIS), is directly related to tobacco taxes and government income. According to the NCI,1 “The willingness of government to take actions against tobacco interests depends on the balance of forces created by the protobacco and antitobacco constituencies and the government's perceptions of health risks associated with tobacco use. Increased taxes on tobacco are an early result of this growing government willingness to act against tobacco interests”. Aim: Demonstrate that the implementation of Article 6 of the WHO Framework Convention on Tobacco Control (FCTC) is a cost-effective measure that results in reduced prevalence and increased tax revenues. Strategy/Tactics: In December 2011, the Brazilian government established a new taxation system and a minimum price policy for cigarettes, aligned to the Article 6 of the WHO FCTC to reduce the demand on tobacco products. Program/Policy process: The new federal taxation system on tobacco products started in 2012 and defined progressive and annual increases by 2016. The reduction in prevalence followed this trend, as did the increase in tax revenue. Some federal states also increased their taxes to tobacco products in the same period, but were not accounted for in this study. Outcomes: This new policy has raised the level of total taxes and, even contributing to the reduction of cigarette consumption, the government income has increased 19% since 2011, and 130% from 2007 to 2016. According to the Risk and Protective Factors Surveillance for Chronic Diseases Telephone Survey (VIGITEL), the total prevalence rate decreased from 15.6% in 2007 to 10.4% in 2015. The national cigarette production decreased from 5,701,586 million packs with 20 units to 2,660,457 in 2016, reflecting the reduction in consumption. [Figure: see text] What was learned: Brazil´s experience shows that there is no economic or revenue risk by raising the tobacco taxes, an argument used by the tobacco industry. In the long term, when consumption is brought to very low levels, there may be a reduction in the revenues, but also the spending on tobacco-related diseases shall decline. Reference 1. National Cancer Institute. Greater Than the Sum: Systems Thinking in Tobacco Control. Tobacco Control Monograph No. 18. Bethesda, MD, U.S. Department of Health and Human Services, 2007.