Originally published in the September 12 edition of World Tax Daily (Copyrights Tax Analysts – www.taxanalysts.com)
Brazilian Minister of Health Jose Gomes Temporão has announced plans to propose a law project that would create a new tax on sales of cigarettes to fund the research, treatment, and prevention of tobacco-related diseases.
The plan is to create a BRL 1 tax per pack of cigarettes sold in Brazil (where the retail price averages BRL 3 per pack). According to Health Ministry estimates, the new tax could generate approximately BRL 5 billion (approximately $2.5 billion) in extra tax revenue, a figure that is 25 percent higher than the Health Ministry’s entire 2007 budget of BRL 4 billion.
The law project is still in the early stages of discussion within the Health Ministry. The next steps include discussions with other Cabinet ministries, such as the Ministry of Finance, and the formal submission of the law project to Congress. No deadline has been announced for the submission of the law project.
David Roberto R. Soares da Silva