In an important moment for public health and food justice, Brazil's President Luiz Inácio Lula da Silva signed a landmark complementary law for the country’s tax reform, originally approved in December 2023, that promises to reshape the nation's fiscal landscape and prioritize the health of its citizens. The Brazilian Chamber of Deputies first approved the complementary law, which introduces important food policy measures, including the following:
An Excise Tax on sweetened beverages, alongside tobacco and alcohol.
A Zero-Tax rate for a basic basket of healthy and sustainable products.
A 60% reduced tax rate for horticultural and minimally processed products, as well as nuts, oils and flours representative of Brazil’s socio-biodiversity.
A Standard Tax rate for all other food products (mostly ultra-processed products).
A critical victory within the reform is the inclusion of the Excise Tax on sweetened beverages—a measure designed to curb the consumption of harmful products and promote healthier choices. This triumph reflects the tireless advocacy of our Brazilian partner organizations led by ACT Health Promotion, whose guidance was instrumental in mobilizing public and political support. Advocates highlighted the health and economic benefits of such tax and countered misinformation propagated by the food and beverage industry. Their ability to mobilize diverse stakeholders, from civil society organizations to public health experts to decision-makers, created a unified front that proved decisive in overcoming resistance.
The policy win comes after intense debates and significant challenges. It’s emblematic of the power of persistent advocacy and the importance of placing public health at the forefront of policy decisions. Proposed amendments during the Senate review process threatened to weaken crucial public health protections, including a concerning move to remove sugary drinks from the Excise Tax and the possibility of a reduction of up to 25% in the tax rate for taxpayers who carry out actions to mitigate environmental or human health damage. However, efforts led by a coalition of public health advocates and supportive lawmakers successfully reversed these setbacks, ensuring that the final legislation aligned with the goal of reducing health inequities.
The new Excise Tax discourages the consumption of products linked to obesity, diabetes and other non-communicable diseases—a growing problem in Brazil, where nearly 25% of the population is obese and close to 10% live with diabetes—and it also generates valuable revenue that can be strategically reinvested in strengthening health initiatives. It sends a clear message that Brazil is committed to prioritizing the health of its citizens over the interests of the food and beverage industry.
Furthermore, the reform includes provisions specifically designed to reduce health inequities by making healthy foods more accessible to all. The implementation of a tax-free basic food basket and a reduced tax rate on minimally processed and culturally significant foods will help ensure greater access to nutritious foods and water for the most vulnerable populations. These measures are a testament to the reform's commitment to creating a fairer and more inclusive society where everyone can thrive.
GHAI played a supportive role in this campaign, providing ACT and other local partners that supported the campaign, such as IDEC and NUPENS, with technical assistance and resources to enhance their advocacy efforts. This included strategic communications support to frame the public narrative, research dissemination to strengthen evidence-based arguments and demonstrate the reform's potential benefits and capacity-strengthening initiatives to bolster grassroots advocacy.
The passage of this complementary law is a testament to the power of advocacy and the importance of prioritizing public health in policymaking. This achievement underscores the potential of tax policy as a tool for creating healthier, fairer societies—a vision that Brazil’s tax reform brings closer to reality.
