In a Poder360 webinar, Edson Vismona cites a study that shows that Brazilians support the tobacco tax review to contain smuggling
To combat smuggling, most of the population would support a tax review, concludes participants in the webinar “Illegal cigarette market: challenges and solutions”organized by Power 360 in partnership with the FNCP (National Forum Against Piracy and Illegality).
Edson Vismona, president of the forum, mentioned that a survey by the Ipec Intelligence, which showed that 42% of the population is in favor of a change in the tax on the product. Only 28% disagree. Another 25% are neither against nor in favor. Only 5% had no opinion.
The president of the forum stated that the high taxes favor the illegal market, especially the smuggling of cigarettes across the country’s borders. Currently, the price of illegal cigarettes is 65% lower than the legal product and the main attraction of illicit cigarettes, causing a loss to the country of R$ 10.2 billion in tax evasion, in 2021 alone.
Vismona explained that Paraguay charges 20% tax for the production of cigarettes. In Brazil, taxation varies from 70% to 90% with ICMS (Tax on Circulation of Goods and Services). “We have to innovate. address these issues.” stated. “In Mato Grosso alone, 32% of the market is dominated by the illegal market”he said.
To contain smuggling, Vismona believes that society better understands that repression is not enough. In other words, among Brazilians who have an opinion on taxation on cigarettes, approximately 60% are in favor of a tax review in the sector to combat smuggling. Here’s the full research with data (48 KB).
During the debate, Colonel Wagner da Silva, director of the PM-MS Border Operations Department, explained that there are “blood trail” behind the practice of smuggling. “It needs a very strong action to fight this crime”he said.
In the view of those present in the debate, one of the measures would be precisely to make illegal market products less attractive to consumers. The profit from smuggling, among other things, finances criminal organizations. Pery Shikida, an expert in the economics of crime, cited one result of this problem: children and teenagers are co-opted into smuggling cigarettes across the border.
Colonel Wagner defended the implementation of several public policies to contain crimes, among them, tax remission. “Repression is important, we have improved, we have invested in high technology to face this crime. But it is not enough. Other measures must be taken.” said the colonel.
Watch the seminar:
PANDEMIC WAS EMPIRICAL STUDY
During the covid-19 pandemic, the share of cigarette smuggling in the Brazilian market dropped because of the increase in the dollar and the lower supply of the illegal product in the country. It was the 1st drop since 2015.
Another conclusion of the seminar is that police repression is important, but insufficient to combat smuggling. The country has a border of 25,000 kilometers long. An action that prevents the entry of illegal products into the country is currently impossible. The same goes for the resolution via diplomacy between Brazil and Paraguay, which has not proved to be effective so far.
Colonel Wagner Ferreira da Silva, principal of DOF (Department of Border Operations) of the Military Police of Mato Grosso do Sul said that repression is important and has been improved. High technology contributes, but other measures must still be adopted.
The colonel mentioned that most vehicles used to transport contraband are stolen. He said crime routes are shared between criminals. “We have already seen cargo seized in the hills of Rio de Janeiro, and used as currency”said the colonel.
THE SEMINAR
THE Power 360 promoted, in partnership with the FNCP (National Forum Against Piracy and Illegality), the webinar “Illegal cigarette market: challenges and solutions” this Tuesday (May 17, 2022), from 3 pm to 4:40 pm. The objective was to discuss the impacts of illicit cigarette marketing in Brazil and the possible ways to inhibit the illegality of the product and provide national economic growth.
They participated in the debate, mediated by the editorial director of the Power 360Fernando Rodrigues:
- Edson Vismona, president of the FNCP;
- Pery Shikida, economist, professor at unioeste (Universidade Estadual do Oeste do Paraná) and specialist in economics of crime;
- Colonel Wagner Ferreira da Silva, principal of DOF (Department of Border Operations) of the Military Police of Mato Grosso do Sul.
Read other reports about the webinar:
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