Sin Taxes: Between Public Health and the Risk of Disguised Protectionism
14 Pages Posted: 7 Nov 2023
Date Written: October 7, 2023
Abstract
Taxing unhealthy products, known as "sin taxes", is a strategy to discourage the consumption of items such as tobacco, alcohol and unhealthy foods. Originating in the era of Adam Smith, this practice has received support from global health organizations such as the WHO, which recognize its potential to promote healthy habits. However, as these taxes evolve, economic and trade concerns arise. The WTO, for example, highlights the risks of covert protectionism, especially when imported products are taxed differently. Brazil, in proposing the "Selective Tax" which encompasses health and environmental concerns, faces this delicate balance. It is therefore essential that the implementation of these taxes is clear, based on science and aligned with international standards to prevent accusations of protectionism.
Keywords: Sin taxes, Public health, WTO, Protectionism, Selective taxation
JEL Classification: K34, F13
Suggested Citation: Suggested Citation