The change in the formula that sets the allocation now stipulates that 2% of the annual net revenue from the tax will go to smoking prevention policies, which will result in a drop of R$153 million in 2026 compared to last year.
The Government decided to change the tobacco tax allocation model to the National Health Service, resulting in a significant reduction in funds allocated to the health system.
According to the proposal included in the State Budget for 2026, the amount could fall from 186 million eurosregistered in 2025, to around 33 million, a reduction of 153 million euros.
The change results from a new formula that sets at 2% the portion of the annual net tobacco tax revenue allocated to tobacco prevention and control policies. Until now, a model was in force that attributed all revenue exceeding 1,466 million euros to the SNS. Based on the 2025 budget execution, this model guaranteed a significant transfer to the health system, but depended on surpluses recorded only at the end of the year.
According to the Government, the change aims to make financing more predictable and adjusted to the capacity to execute public health programs. A source from the office of the Secretary of State for Health, Ana Povo, explains that the previous model “depended on uncertain surpluses that were only determined late in the year” and that the funds were used to cover current NHS expenses, instead of financing prevention policies.
Still, the decision is being criticized for reducing an important source of financing in a context of increasing pressure on the healthcare system. The Budget itself initially provided for the possibility of allocating up to 5% of tobacco tax revenue, which could translate into around 83 million euros. However, a joint order from the Finance and Health areas set the final value at 2%.
The former Secretary of State for Health Promotion of the PS Government, Margarida Tavares, considers that the change represents a “huge reduction” in funding for health. “I think this reduction It’s merely an interest in not making such a large transfer to the health sector”, he criticizes.
However, the Government insists that the new model allows for a “gradual and responsible” approach, ensuring greater predictability in financing.
