CIGARETTE TAXATION: EXTRA-FISCALITY AND SMUGGLING

Abstract

This paper, based on bibliographical research, presents the general overview of the Brazilian tax system, with emphasis on the limitations on the power to tax and their relativization through the extra fiscality perceived on cigarette’s taxes. It can be seen that the tax rates on this product are very significant, but their application has not been producing the expected results and has ended up intensifying the problem of smuggling, contributing to a criminal specialization aimed at a greater financial return. Although Brazil adopts the practices recognized worldwide as ideal for combating smoking and its guidelines, it is possible to conclude that its long borders and location set it apart from other countries, increasing its challenges. The study aims to identify how cigarette taxation is used as a public policy tool (extrafiscality) with the purpose of reducing tobacco consumption, while simultaneously assessing the impacts of this model on promoting smuggling. We can therefore conclude that it is necessary to adopt new practices that reduce the imbalance between state resources and criminal innovation, in order to guarantee public health and safety in the country.