By Laura Cury and Juliana Ferreira
A historic tax reform
After over three decades of political debate, Brazil has finally approved a historic tax reform to simplify the country’s complex fiscal system and promote social equity. Extensive negotiations in the Executive and Legislative branches of our government marked the path to approval. The Brazilian Congress faced challenges balancing economic, political, and social interests while drafting the reform, reflecting a compromise between different interests. After multiple rounds of voting, the Chamber of Deputies approved the reform regulations on December 17, 2024, and it now awaits presidential sanction.
Brazil’s tax reform marks a critical step toward a more just and efficient fiscal system that prioritizes both economic growth and public health.
Laury Cury and Juliana Ferreira
Among its important provisions, the tax reform leads to the simplification of the existing set of taxes, the expansion of efficiency, and the improvement of the business environment. From a public health perspective, it introduces a selective tax on products harmful to health, including alcoholic beverages, tobacco products, and sugary drinks.
Brazil’s promising new alcohol tax
People, communities, and public health advocates are hailing the measure. It seeks to lower population-level consumption of these harmful products, reduce the burden of preventable diseases, such as heart disease, diabetes, cancer, and other health conditions. And it promotes overall health and well-being for our society. The reform also establishes a zero-tax basket for essential and minimally processed foods, along with key products from Brazil’s socio-biodiversity, such as nuts, oils, and flours, fostering healthier consumption patterns.
This was an important advocacy win.
Laury Cury and Juliana Ferreira
The alcohol tax reform brings significant public health gains. The introduction of a mixed tax system for alcohol based on ad rem and ad valorem rates follows WHO recommendations, ensuring inflation-adjusted tax rates. This inflation adjustment, through the IPCA index, mitigates the erosion of tax rates over time. This is important and evidence-based to ensure alcohol does not become more affordable over time. In this way, the new alcohol tax has the potential to lower population-level alcohol consumption and related harms and costs.
Community mobilization and advocacy for people-focused pro-health taxes
This was an important advocacy win.
Another significant victory was the removal of a draft article that proposed a 25% tax discount for companies using so-called “mitigation strategies.” This measure could have facilitated green- and social-washing by health harming corporations, such as the alcohol industry in Brazil. It would have weakened the reform’s public health focus.
But civil society organizations, backed by scientific evidence, successfully advocated for its removal. On ACT’s social media, messages were directed at the rapporteur, the government leader, and allied parliamentarians, urging the removal of this article. We also coordinated with our health promotion network to launch a large-scale “sharing campaign,” amplifying pressure on the National Congress. Articles in significant media outlets were also published.
However, not all proposals succeeded. Our efforts to remove a paragraph allowing differentiated tax rates for small alcohol producers were unfortunately unsuccessful. This provision risks enabling large alcohol corporations, operating through smaller craft beer brands, to exploit tax exemptions. Even when genuinely benefiting small-scale producers, this measure warrants scrutiny from a public health perspective, as ethanol in beer, wine, and liquor remains harmful to health regardless of the producer or scale of production.
A flurry of benefits for people, families, and society
Overall, however, Brazil’s tax reform is expected to generate substantial public health benefits by discouraging the consumption of harmful products through raising prices, lowering affordability and in this way reducing harms and costs to our people, communities, and society at large.
In Brazil, alcohol, tobacco, and soft drinks are major contributors to the NCDs burden. By making these products less accessible, the aim is to reduce their consumption, alleviate healthcare costs, and improve population health outcomes over time.
Additionally, exempting minimally processed foods from taxation encourages healthier eating while supporting Brazil’s local agricultural sector. This policy not only addresses food security but also promotes sustainable farming practices and strengthens the national economy.
Throughout the whole process of the tax reform, industry interference remained a constant challenge…”
Laury Cury and Juliana Ferreira
Vulnerable groups, who disproportionately suffer from NCDs and rely on the public health system, stand to benefit the most. By reducing spending on harmful products such as alcohol, families can redirect resources toward healthier food, education, and housing.
Additionally, a reduced burden of disease alleviates pressure on the public health system, making it more efficient and responsive. This was also part of ACT’s advocacy strategy, which included publishing articles on this topic and leveraging social media to amplify awareness and engagement.
Lessons from the success in overcoming (alcohol) industry interference
Throughout the whole process of the tax reform, industry interference remained a constant challenge, as alcohol industry lobbyists persistently sought to dilute the reform’s public health measures.
However, a significant text was approved, and key lessons emerged from this experience.
ACT’s advocacy to safeguard the incidence of a selective tax on alcoholic beverages centered on raising awareness of the health risks linked with the products of the alcohol industry. During visits to parliamentary offices, ACT distributed factsheets containing critical data to substantiate the need for effective alcohol taxation.
In addition, ACT proposed amendments to strengthen the reform and remove provisions that could undermine the effectiveness of the selective tax. Among these proposals were the reinstatement of the already mentioned annual inflation adjustment, indexed to inflation (a measure adopted by rapporteur Eduardo Braga in the Federal Senate), and a provision ensuring no revenue loss during the transition from the current taxation model to the one introduced by the reform.
In October, ACT organized a two-day advocacy campaign in collaboration with other civil society organizations – as part of the 3S Tax Reform coalition – promoting a tax system that is healthy, equitable, and sustainable (saúde, solidariedade, and sustentabilidade in Portuguese). Together, we visited over ten parliamentary offices and distributed copies of the Manifesto advocating for a tax reform centered on health, sustainability, and social justice.
Additionally, the study on the costs of alcohol to the Brazilian public health system, conducted by researcher Eduardo Nilson from Fiocruz and supported by ACT and Vital Strategies, was launched in November.
The study showed that alcohol causes 12 deaths an hour in Brazil and that alcohol harm costs our society R$18 billion a year.
This garnered extensive media coverage, further bolstering our advocacy efforts and strengthening our arguments.
From this, it was clear that advocating in coalitions strengthens impact. Collaboration with public health, environmental, social equity, and sustainable development organizations created momentum and legitimacy. Evidence-based advocacy supported by international scientific consensus and endorsements from respected organizations amplified civil society’s voice in legislative debates. Our advocacy efforts garnered broad international support. Key organizations like Movendi International and its 160+ members submitted letters to the Brazilian Senate emphasizing the health benefits of alcohol taxation. Support from global health bodies such as the WHO and the World Bank strengthened the reform’s legitimacy, showcasing Brazil’s alignment with international best practices.
For instance, the World Bank issued a policy note in October 2024 saying:
Taxation on harmful products will primarily benefit low-income families in Brazil.
Brazil has a unique opportunity to improve public health by properly planning the taxation of tobacco, alcohol, and sugary drinks. A new policy note from the World Bank provides technical recommendations on how to structure and implement these taxes to achieve significant progress in public health and tax revenue.”
Maldonado N., Blecher E, and Fleischhaker, C. (2024). Saving Lives while Raising Revenue: Opportunities in Brazil’s reform of indirect taxes to improve Tobacco, Alcohol, and Sugar-Sweetened Beverages (SSBs) Excise Taxes. Health Taxes Knowledge Note No. 6. Global Tax Program, World Bank. Washington, DC.
Reception of the tax reform
With the recent approval of the tax reform, public officials and experts celebrate it as a transformative moment for Brazil’s fiscal and social landscape.
For example, Congressman Reginaldo Lopes (PT-MG), the bill’s rapporteur, described it as “a historic milestone for Brazil and a great victory for the Brazilian people,” emphasizing its potential to promote social justice by ensuring “food on the table and social equity for all.”
Congresswoman Maria do Rosário (PT-RS) highlighted that the tax exemption on basic food items would benefit vulnerable families, calling it “an essential measure that will support thousands of families in need.”
From an economic perspective, Bernard Appy, Special Secretary for Tax Reform at the Ministry of Finance, called the reform “a monumental step forward” for improving tax system efficiency, boosting investment, and fostering national economic growth.
Maristela Monteiro, former PAHO senior advisor on alcohol and current consultant and alcohol policy expert, stated:
The efforts from civil society in these last years, backed up by scientific evidence and support from several UN agencies finally paid off. The public will gain as well as the government when taxes are sufficiently increased, making alcohol products less affordable.”
Maristela Monteiro, former PAHO senior advisor on alcohol and current consultant and alcohol policy expert
Crucial next steps for the alcohol tax reform
As the regulation of the text approaches, several crucial next steps remain. In 2025, we must advocate for sufficiently high tax rates to help lower alcohol affordability, reduce population-level alcohol consumption, promote public health. It will also be key to address the “small producers” issue by ensuring clear legal definitions to prevent Big Alcohol misusing tax exemptions.
However, the victory gained thus far gives us energy and enthusiasm to continue pursuing our public health goals in the year to come.
Brazil’s tax reform marks a critical step toward a more just and efficient fiscal system that prioritizes both economic growth and public health. By discouraging the consumption of harmful products while promoting healthier dietary habits through tax incentives, the reform demonstrates how taxation can be leveraged as a tool for public health and social good.
As the country prepares for regulation of the text, its further success will depend on efficient advocacy, sustained political will, and continuous public engagement. This reform can set an important precedent for integrating health and economic policies in other nations facing similar challenges, and significantly improve the lives of millions of Brazilians.
For further reading
Policy news for Brazil: “People Desire Alcohol Policy Action New Surveys Show“
Special Alcohol Issues Feature: “Harnessing the Power of Alcohol Taxation“
Policy news: “New Report Shows Raising Pro-Health Taxes Could Save 50 Million Lives Over Next 50 Years”
Study: “Alcohol Taxation Among 12 Most Efficient Ways to Eradicate Poverty, Promote Development“
Resource page by Movendi International with 500+ articles: The health and development potential of raising alcohol taxation
RESET Alcohol: New Initiative to Tackle Alcohol Harms Will Focus on Taxation
About Our Guest Experts
Laura Cury
Laura is the Alcohol Project Coordinator at ACT Health Promotion.
You can follow Laura’s work on LinkedIn.
Juliana Ferreira
Juliana is the Alcohol Advocacy Advisor at ACT Health Promotion.
You can follow Juliana’s work on LinkedIn.
Both guest experts work at Movendi International member organization ACT Health Promotion. You can follow ACT’s important work – including their alcohol harm awareness campaign “Dose of reality” on LinkedIn, on Instagram, on Facebook, and on the official ACT Health Promotion website.
