Assessing the Effects of a Tobacco Tax Reform on the Industry Price-Setting Strategy
Bibliographic Data
| ID | 15470832 |
|---|---|
| Authors | José Angelo Divino (0000-0001-7359-7539, Universidade Católica de Brasília, corresponding author), Philipp Ehrl (0000-0002-6661-8976, Universidade Católica de Brasília), Osvaldo Candido (0000-0002-4850-6989, Universidade Católica de Brasília), Marcos Aurélio Pereira Valadão (0000-0002-9301-3366, Fundação Getulio Vargas) |
| Year | 2021 |
| Volume | 18 |
| Issue | 19 |
| Pages | 10376-10376 |
| Publication date | 2021-10-02 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | International Journal of Environmental Research and Public Health (JOURNAL) |
| Journal identifiers | ISSN: 1661-7827 • E-ISSN: 1660-4601 |
| Publisher | Multidisciplinary Digital Publishing Institute (PUBLISHER • CH) |
| DOI | 10.3390/ijerph181910376 |
| PMID | 34639676 |
| OpenAlex | W3203258875 |
| Language | EN |
| References cited | 23 |
In July 2020, the Executive Power submitted Bill no. 3887-2020 as the first step towards a wide reform of the Brazilian tax system. It will replace the current PIS/COFINS (charged on turnover of companies) by the CBS (a tax on goods and services), which includes a special regime for cigarettes. The novelty is that the specific cigarette tax will be charged on the highest retail price per cigarette brand across the country. This research simulates three scenarios that differ according to the price-setting strategy of the tobacco industry in reaction to the proposed tax reform. In all simulations, the tax reform would result in considerably higher cigarette prices, lower cigarette consumption, higher tax collection, and an implicit minimum price that is far above the current official price floor. Furthermore, the price dispersion and cross-border shopping across states would be reduced because prices and tax burden per brand would tend to be the same across the country due to the dominant price-setting strategy in the cigarette industry
Ad valorem tax · Business · Consumption (sociology · Economics · Indirect tax · Monetary economics · Novelty · Public economics · Tax reform · Tobacco industry · Value-added tax · Fiscal Policy and Economic Growth · Medicine · Taxation and Compliance Studies
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| Citation velocity | historical |
|---|---|
| Highly cited | No |