Baseline | Scenario I | Scenario II | Scenario III | |
Tax revenue (BRL Mi. month) | 1125.49 | 1433.16 | 1576.32 | 1217.29 |
Change (baseline ref) | – | 27.34% | 40.06% | 8.157% |
Change (illicit—10%) * | 8.41% | 8.59% | 8.49% | 8.31% |
Cheaper cigarettes (PC2) | 6.40 | 7.57 | 9.83 | 7.63 |
Tax burden | 73.93% | 77.85% | 82.95% | 78.17% |
Share of tax revenue | 56.89% | 53.64% | 55.78% | 59.50% |
Consumption (% change) | −9.88% | −25.33% | −6.69% | |
Premium brands (PC3) | 8.67 | 12.65 | 16.43 | 9.17 |
Tax burden | 67.77% | 77.85% | 82.95% | 69.60% |
Share of tax revenue | 43.11% | 46.36% | 44.22% | 40.50% |
Consumption (% change) | −20.85% | −39.96% | −1.04% |
*Additional overall tobacco tax revenue due to a decrease of 10% in the illicit market. Scenario I is the no-tax-revenue-loss case, where no federal state loses revenue. Scenario II defines the ad valorem tax that maximises total nationwide tobacco tax revenue under the condition that no state experiences revenue losses. Scenario III includes a specific excise tax with no tax revenue loss for all federal states. The share in tax revenue refers to the percentage of revenue obtained by each price category relatively to the total cigarette tax collection.
PC2, price category 2; PC3, price category 3.