The government said it will gradually hike the industrial products tax for cigarettes to 9 per cent, until 2015, from the current level of 6 per cent, reports Dow Jones Newswire.
The government said an increase in the tax on cigarettes is to compensate for the recent tax cuts for other industrial sectors. It expects an increase in cigarette tax revenue to BRL 7.7 billion (EUR 3.34 billion) through 2015, from BRL 3.6 billion currently.
The move comes less than one month after the government announced a cut in taxes for industrial sectors which should help manufacturers to cope with "unfair" competition from overseas, due to the continued appreciation of the Brazilian real versus the U.S dollar. Brazil's currency has gained nearly 30 per cent against the dollar over the last five years and about 7 per cent so far in 2011. (pi)