Tax Increase in Paraguay Can Slow Down Contraband Cigarettes in Brazil

Posted on May 4, 2011
From CRE  Brazil
The decision of Paraguay’s government to increase taxes on cigarette production by 300% caused a judicial dispute with the manufacturers. Five companies are contesting in court decree 5.455 by President Fernando Lugo, signed in November. Business people argue that the increase is unconstitutional and was decided arbitrarily.Besides impacting the internal market, the price increase on Paraguayan cigarettes also causes effects on the contraband product to Brazil. Paraguay’s press is circulating the news that the decree is part of an agreement with the Brazilian government which has always tried to combat illegal cigarettes entering its country.
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