Between Scylla and Charybdis

Economic and Social Impacts of Implementing the Selective Tax on Sugar-sweetened Beverages

Abstract

This article examines the suitability of the selective tax on sugar-sweetened beverages as an instrument for promoting public health. Drawing on the distinction between Pigouvian taxes and sin taxes, it assesses whether the Brazilian selective tax effectively addresses negative externalities or merely discourages the consumption of specific products. Adopting a doctrinal legal approach informed by Tax Law and Economics, the study argues that the selective tax is structurally closer to a sin tax, raising concerns regarding efficiency, horizontal equity, and vertical equity. It concludes that its current legal design limits the achievement of the extrafiscal objectives underlying its adoption.