By Dr Jeffrey Drope, Director, Economics for Health, Research Professor, Johns Hopkins Bloomberg School of Public Health, and Content Committee member, World Conference on Tobacco Control 2025
Once again, we find ourselves at a turning point in tobacco control. The continued resurgence of the tobacco industry alongside a deprioritisation of public health at a global level leaves many vulnerable to the health challenges caused by smoking and tobacco.
Yet, as the challenge evolves, the solutions remain consistent. Above all others, the transformative power of taxation on unhealthy products, especially tobacco, to protect citizens and healthcare systems, by driving down consumption, remains an effective method. But sadly, progress has stalled in recent years.
Reversing policy inertia
Smoking causes over eight million premature deaths each year. At the same time, it creates a significant economic burden – estimated by researchers to be almost two trillion dollars annually.
By implementing effective tobacco tax policies, however, countries have the potential to simultaneously improve the health of their populations while raising government revenue. For every 10% increase in tobacco taxes, consumption typically drops by an estimated 5%, contributing to a long-term decline in smoking rates.
This is nothing new; the efficacy of taxation has been known to the global tobacco control community for many years. And yet, progress has been slow in implementing this. The latest edition of the Economics for Health Cigarette Tax Scorecard shows us how this progress even stalled after 2019. In many countries, cigarettes have become more affordable as incomes grow and inflation lessens the impact of existing taxation policies, and as few new policies are implemented.
As a result, millions of lives continue to be needlessly lost and negatively impacted by smoking.
But there are glimmers of hope – take, for example, Brazil. Despite scoring lower-than-average in the Economics for Health Cigarette Tax Scorecard, the South American country scored highly for its tobacco tax structure. And ongoing discussions in the Brazilian government to reform its overall tax system including how aggressively they tax tobacco products offers much-needed encouragement.
Everything to gain
At the end of 2023 as part of a monumental tax reform in Brazil, the government included a selective tax on unhealthy products as part of a critical Constitutional Amendment. Subsequently, the government passed a new cigarette excise tax structure that incorporates both specific and ad valorem components, which has enormous potential to follow international best practices in tobacco taxation. At this point in 2026, the Brazilian government is considering how high to set these tax rates and how much to emphasize the specific tax, offering a unique opportunity to deploy effective measures to curb tobacco consumption.
Tobacco tax measures are nothing new to Brazil. After ratifying the WHO’s Framework Convention on Tobacco Control (FCTC) in 2005, Brazil introduced comprehensive tax reforms in 2011, reinforcing its commitment to tobacco control. In 2016, tax accounted for 77% of the retail price of the most widely sold cigarette brand.
The most significant reductions in smoking were observed among young people –usually, the audience most targeted by the industry. Furthermore, across Brazilian society overall, the policy reduced smoking most amongst the poorest members of the population, who were impacted the most by the increase in the cost of cigarettes. As a result, personal medical costs and working income losses associated with tobacco-related illnesses decreased for millions. The policy was therefore progressive overall with disproportionately as more health and economic benefits going to those in lower income groups.
Overall in this short time period, Brazil’s tax reforms achieved a 32% decline in domestic cigarette sales.
With tobacco taxes lagging inflation and economic growth, progress in Brazil has stalled since 2015, undermining the progress made. By seizing the opportunity offered by the systemic tax reform, it can get back on track. In a recent Economics for Health spotlight on Brazil’s place in the Cigarette Tax Scorecard, it is suggested that:
- The Government strive for excise taxes to account for at least 70% of retail prices.
- Brazil should implement an automatic adjustment that at a minimum keeps pace with inflation and even better outpaces the combination of inflation and real income growth.
By doing this, we will hopefully see Brazil re-establish itself as a global leader in fiscal policies as a method of greater tobacco control.
A global opportunity
We’ve focused on Brazil as a case study in this article, but these opportunities – and lessons from Brazil’s historic success – can be true for the world as a whole. Brazil’s approach aligns with the WHO FCTC, the first ever global health treaty, which assists governments in adopting fiscal measures to curb tobacco use.
Yet, many policy makers are failing to see taxation for what it is – one of the most effective tools that they can deploy in the fight to curb smoking rates. To ensure progress is restarted, we must reverse the inertia we have seen in recent years.
By aligning with international efforts on fiscal policy to address the tobacco health crisis across the globe, governments worldwide can shape a future where our societies are stronger, more resilient, and protected from continued tobacco harms.