Brazil's Bolsonaro rules out Economy Minister's 'sin tax' idea

Brazil’s President Jair Bolsonaro has ruled out a so-called “sin tax” on beer, cigarettes and sugary food products, an idea floated earlier in the week by Economy Minister Paulo Guedes at the World Economic Forum in Davos, Switzerland.

“Paulo Guedes, sorry, you are my minister, I’m with you 99%, but there won’t be any tax increases on beer, no,” Bolsonaro said in an interview with journalists on Friday after landing in New Delhi, India, on an official trip.

“It can’t be done, we can’t increase the tax burden in Brazil. Everyone consumes sugar every day, it can’t be increased,” he added.

The idea of a “sin tax” is similar to a recent measure in Britain, which has been in force since April last year on products with high levels of salt, sugar and fat, with the aim of combating childhood obesity.

Vice President Hamilton Mourão played down the apparent split between Bolsonaro and Guedes, noting it was normal for ministers to float ideas but final decisions always lie with the president.

Simplifying Brazil’s Byzantine tax system is one of the government’s major economic reform drives this year, but analysts say its complexity means Congressional approval any time soon will be challenging.