Search

Objectives: To estimate the proportions of illicit cigarette consumption in Brazil from 2012 to 2016, a period of sharp increases in cigarette taxes., Methods: We used an approach based on legal sales provided by the Secretariat of Federal Revenues and self-reported consumption data from an annually conducted telephone survey (VIGITEL) to estimate the changes over time in illegal cigarette use in Brazil. For that purpose, we also used available information on the proportion of illegal cigarette consumption from a nationwide household survey conducted in 2013 to calculate a constant proportion of underreporting from VIGITEL in relation to total consumption and sales in Brazil., Results: There was an increase in the estimated proportion of illicit cigarette use from 2012 to 2013 (from 28.6% to 32.3%), then a decrease from 2013 to 2014 (32.3% to 28.8%), and then a sustained trend of increase from 2014 to 2016 (28.8% to 42.8%)., Conclusions: Novel and feasible approaches to estimate changes over time in the illegal market are important for helping the effective implementation of tobacco excise tax policy.

Background: Brazil experienced a large decline in smoking prevalence between 2008 and 2013. Tax rate increases since 2007 and a new tobacco tax structure in 2012 may have played an important role in this decline. However, continuous tax rate increases pushed up cigarette prices over personal income growth and, therefore, some consumers, especially lower income individuals, may have migrated to cheaper illicit cigarettes., Objective: To use tobacco surveillance data to estimate the size of illicit tobacco consumption before and after excise tax increases., Methods: We defined a threshold price and compared it with purchasing prices obtained from two representative surveys conducted in 2008 and 2013 to estimate the proportion of illicit cigarette use among daily smokers. Generalised linear model was specified to understand whether the absolute difference in proportions over time differed by sociodemographic groups and consumption levels. Our findings were validated using an alternative method., Results: Total proportion of illicit daily consumption increased from 16.6% to 31.1% between 2008 and 2013. We observed a pattern of unadjusted absolute decreases in cigarette smoking prevalence and increases in the proportion of illicit consumption, irrespective of gender, age, educational level, area of residence and amount of cigarettes consumed., Conclusions: The strategy of raising taxes has increased government revenues, reduced smoking prevalence and resulted in an increased illicit trade. Surveillance data can be used to provide information on illicit tobacco trade to help in the implementation of WHO Framework Convention on Tobacco Control (FCTC) article 15 and the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products., (Published by the BMJ Publishing Group Limited. For permission to use (where not already granted under a licence) please go to http://www.bmj.com/company/products-services/rights-and-licensing/.)

The Brazilian cigarette excise tax reform of 2011 increased tax rates significantly in the presence of a high proportion of illegal and cheap cigarettes contributing to total consumption. Prior to 2011, tobacco tax policy in Brazil had reduced excise tax share on consumer prices, for fear of smuggling. This report examines two hypotheses explaining why tax authorities changed direction. The first is related to lack of concern regarding smuggling in tobacco industry pricing behavior before 2011 (rather than reducing prices following tax reduction, legal companies increased net of tax prices above inflation and key costs). The second hypothesis regards inconsistent industry assessments of the size of the illicit market, which ultimately undermined the credibility of the industry with tax authorities. The author concludes that the 2011 reform was designed to revert the weakness of previous policies, and did indeed succeed. The post-2011 experience in Brazil indicates that increased cigarette excise taxes can increase government revenues and reduce smoking prevalence and consumption despite widespread smuggling of tobacco products.