In a meeting with Minister Blairo Maggi, representatives of the sector claim that high taxation favors contraband.

Tobacco producers met this Tuesday, the 11th, with Minister Blairo Maggi, of Agriculture, Livestock and Supply, asking for support to postpone the increase in the tax on cigarettes. As of December 1, the Brazilian product will suffer an increase of 7% in the Tax on Industrialized Products (IPI). Farmers want the readjustment to be postponed for a year, arguing that excessive taxes on cigarettes have encouraged smuggling from Paraguay.

The president of the Brazilian Institute of Competition Ethics (Etco), Evandro Guimarães, warned that in 2015 alone, Brazil lost around R $ 4,5 billion in revenue from cigarette smuggling. He revealed that more than 35% of the Brazilian market has already been affected by smuggling. "The leading sales brand in São Paulo comes from Paraguay," he said.

The president of Sinditabaco, Iro Schünke, said that he is not asking for tax cuts, but only for the government to assess whether the adjustment can be postponed for 12 months. Schünke pointed out that much of the tobacco produced in the country is used for export and that some cigarette factories have already been closed because of excessive taxation.

The South Region is the largest tobacco producer in the country. In the three states - Rio Grande do Sul, Paraná and Santa Catarina - there are more than 150 thousand families that live from the tobacco plantation in 574 municipalities. In 2004, the number of producers was 250 thousand in the region.

The minister said he will take the matter to President Michel Temer. He reaffirmed support for the sector, but recalled that taxation is not part of the Ministry of Agriculture's duties.

Source: Canal Rural On Line (12/10)