MercoPress. South Atlantic News Agency

World Bank endorses Brazil taxing health-harming products

“Brazil has a valuable opportunity to improve public health and economic outcomes through strategic taxation,” the WB said

According to a statement released Wednesday by he World Bank (WB), South America's largest country has “a unique opportunity” to improve public health by properly planning taxes on products such as tobacco, alcohol and sugary drinks that are known to be potentially harming to humans, Agencia Brasil reported. The organization also listed a series of technical recommendations on how to structure and apply these taxes “in order to make significant progress in public health and tax revenue.”

“The tax reform underway in Brazil, made possible by Constitutional Amendment 132, provides an opportunity to do so. It can be achieved through the Selective Tax in the Complementary Law, currently under discussion in the Senate, and the Ordinary Law that should be presented to Congress in 2025,” the document read.

Every year around 341,000 deaths in Brazil are attributable to the consumption of tobacco, alcohol and sugary drinks - around 20% of all deaths in the country. “These products are the main contributors to cardiovascular diseases, cancer, diabetes and chronic lung diseases.”

“The implementation of special taxes on these harmful products is a proven strategy to stop and reduce their consumption,” the bank went on.

The prices of tobacco products and sweetened alcoholic beverages in Brazil are “relatively low” when compared to Latin American and Caribbean and G20 countries. “The prices make these products very accessible to the Brazilian population, contributing to the high consumption rates,” it was also noted.

“From a health point of view, reducing consumption of these products will lead to a significant decrease in deaths and preventable diseases. Despite the expected decline in consumption, the country will still be able to collect higher tax revenues from these taxes,” the statement also argued.

“Low-income populations are more sensitive to price changes. A significant price increase driven by the implementation of well-designed health taxes will substantially reduce the consumption of such products among this group,” it further suggested. According to the bank, most deaths from the consumption of these products occur in low-income households.

“Brazil has a valuable opportunity to improve public health and economic outcomes through strategic taxation and it is crucial to seize it. Implementing well-designed health taxes will save countless lives, increase human capital and boost the economy's productivity,” the World Bank concluded.

The Senate Constitution and Justice Committee (CCJ) approved on Wednesday a work plan for the bill regulating tax reform, presented by the rapporteur of the matter, Senator Eduardo Braga (MDB-AM). Debates will begin next week. Complementary Bill 68/2024 was sent to the Senate in August, but due to an agreement with Senate Speaker Rodrigo Pacheco and CCJ Chief Davi Alcolumbre, the wording would only begin to be processed at the end of the municipal elections calendar, Agencia Brasil also pointed out.