increase in cigarette tax finances organized crime, warns abifumo

The Lula government increased the specific tax rate on cigarettes by 55.6% through Provisional Measure 1,399, published on November 4, 2026, according to Diário do Poder. With the change, the specific tax jumped from R$2.25 to R$3.50, generating a strong reaction from the production sector and entities representing the industry.

According to Diário do Poder, the Brazilian Tobacco Industry Association criticized the new taxation on November 5, 2026. The entity highlighted that the measure could increase the profits of organized crime, pointing out that the clandestine market for the product already generates R$10 billion per year in the country.

Abifumo, chaired by Edimilson Alves, reminded Diário do Poder that in 2019, illegal products represented 57% of all national cigarette consumption. The central concern is that the increase in the tax burden will push even more consumers into informality and illegal trade.

Also according to Diário do Poder, the Minister of Finance, Dario Durigan, declared on November 5, 2026 that there was an agreement on the number with the sectors involved. At the same time, Revista Oeste reported that the Selective Tax established by the same MP 1,399 brings specific rules applicable for the year 2027.

What changes for the investor

The advancement of fiscal policies focused on increasing revenue through selective taxes increases the regulatory risk for companies in tax-intensive sectors. For those who invest, the scenario requires careful monitoring of how the increase in the cost of legal products impacts business margins and stimulates the underground market, affecting competitiveness and legal security in the business environment.

Automatically translated from Portuguese.