Plataforma de Apoio a Gestão Estratégica - PAGE/UCB

Projeto: Economic research to support tobacco tax reform in Brazil

Vigência: 01/01/2021 a 31/12/2022
Situação: Inativo
Programa/Curso: Programa Stricto Sensu em Economia
Escola: Escola de Humanidades, Negócios e Direito
Agência: University of Illinois at Chicago
Edital: Convênio University Of Illinois at Chicago - UIC x UCB
Chamada Convênio University Of Illinois at Chicago - UIC x UCB
Prevalence of tobacco use among Brazilian adults dropped from 14.9% in 2013 to 12.8% in 2019 (PNS 2019). These low levels of tobacco use have not been seen in Brazil in half a century. However, still over 20 million Brazilians use tobacco products (PNS 2019) and, among those and former smokers, some 191,000 die each year prematurely due to tobacco-related diseases (IHME 2020). Moreover, although tobacco taxes are one of the most effective ways to prevent tobacco use and its associated health and economic consequences, their full potential have not been used in Brazil. While tax accounts for a large share of cigarette price, Brazil has the second most affordable cigarettes in Latin America, after Paraguay (WHO GTCR 2019).

A complicated tax structure further undermines the public health impacts of tobacco taxation. Brazil’s attempt to access OECD as a full member is also triggering changes in the domestic tax system. Several proposals for reform of the tobacco tax structure have been proposed in the past year. In the previous funding cycle, the analysis of the potential impacts of these tax proposals prepared by UCB have been used to inform the debate around the tax policy change. The UCB models of the proposed constitutional amendment and the implementation of the CBS tax have informed tobacco control advocates in Brazil and have been presented directly to the government officials at the Brazilian federal revenue service agency.

As the reform process continues into 2021, UCB will build upon this analysis by conducting research in two areas. In 2021, the UCB will use newly available data, including data from the 2019 PNS study to generate the new knowledge on the impact of cigarette prices on switching between cigarette price categories (cross-price elasticities). The effects for the lowest price category, which is mostly illicit cigarettes, will also be calculated. The cross-price elasticity estimates will allow UCB to obtain even more precise estimates of the impacts of future tax reforms. Based on those new estimates, the researchers will conduct further analysis of the impacts of future tax increases on cigarette consumption and tax revenue in Brazil. Within this activity the UCB will conduct an analysis of the feasibility of linking the revenues from the tobacco tax to financing tobacco control and treatment of tobacco-related diseases in the constitutional amendment. This revenue reinvestment will prevent premature more deaths and promote a healthy and productive workforce in Brazil. Separate proposals will consider using the new revenue by the federal government entirely as well as diving the revenue between municipalities, states and the federal government. The researchers will also explore the possibility of including estimates of the lives saved due to the proposed tax increases into their models.

Using the outcomes of the 2021 research, in 2022 UCB will evaluate the impacts of curbing illicit cigarette trade in Brazil. The latest government survey reveals that for around one-third of Brazilian adult smokers the last-purchased cigarette pack was illicit (PNS 2019). Although these latest estimates indicate that the illicit cigarette trade is on decline in Brazil (Szklo & Iglesias 2020), the illicit market share levels are still concerning to policy makers. With most of the illicit packs coming from Paraguay (Szklo et al. 2020), close cooperation of enforcement and tax administration agencies between the two countries will be needed to tackle the illicit trade problem.
1 - JOSE ANGELO COSTA DO AMOR DIVINO - Pesquisador Interno
2 - Marcos Aurélio Pereira Valadão - Pesquisador Externo
3 - OSVALDO CANDIDO DA SILVA FILHO - Pesquisador Interno
4 - PHILIPP EHRL - Pesquisador Interno
Orçamento Aprovado:
Material de ConsumoR$ 341.715,00
Material PermanenteR$ 22.790,00
Valor TotalR$ 364.505,00
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