Brazil has “a unique opportunity” to improve public health by properly planning taxation on products such as tobacco, alcohol and sugary drinks. The assessment is from the International Bank for Reconstruction and Development (Bird), a financial institution linked to the United Nations (UN) and also known as the World Bank.
In a note released this Wednesday (23), the entity lists a series of technical recommendations on how to structure and apply these taxes “so that there is significant progress in public health and tax revenue”.
“The ongoing tax reform in Brazil, made possible by Constitutional Amendment 132, brings an opportunity to do so. It can be achieved through the Selective Tax in the Complementary Law, currently under discussion in the Senate, and the Ordinary Law that must be presented to Congress in 2025.”
According to Bird, every year, around 341 thousand deaths recorded in Brazil are attributable to the consumption of tobacco, alcohol and sugary drinks – something around 20% of the total deaths recorded in the country. “These products are those that most contribute to cardiovascular diseases, cancer, diabetes and chronic lung diseases.”
“The implementation of special taxes on these harmful products is a proven strategy to deter and reduce their consumption”, assessed the bank in the statement.
Little tax
The document also mentions that the prices of tobacco products and sugary alcoholic beverages in Brazil are “relatively low” when compared to those in Latin American and Caribbean countries and G20 countries. “The values make these products very accessible to the Brazilian population, contributing to high consumption rates.”
“From a health perspective, reducing the consumption of these products will lead to a significant reduction in deaths and preventable diseases. Despite the predicted decline in consumption, the country will still be able to collect higher tax revenues from these taxes.”
Low-income families
Poorer families, according to Bird, should benefit most from the policy.
“Low-income populations are more sensitive to price changes. A significant price increase driven by the implementation of well-designed health taxes will substantially reduce consumption of such products among this group.”
According to the bank, the majority of deaths due to the consumption of these products occur in low-income households.
“Brazil has a valuable opportunity to improve public health and economic outcomes through strategic taxation and it is crucial to seize it. Implementing well-designed health taxes will save countless lives, increase human capital and increase the productivity of the economy,” concluded the World Bank.
Tax reform
The Senate Constitution and Justice Committee (CCJ) approved this Wednesday (23) a work plan for the bill regulating tax reformpresented by the rapporteur of the matter, senator Eduardo Braga (MDB-AM). Debates begin next week.
Complementary Bill 68/2024 was forwarded to the Senate in August, but, due to an agreement with the presidents of the Senate, Rodrigo Pacheco (PSD-MG), and the CCJ, Davi Alcolumbre (União-AP), the text it would only begin to be processed at the end of the municipal elections calendar.
