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The National Forum Against Piracy and Illegality (FNCP) has unveiled alarming figures, showing that Brazil lost approximately R$ 441 billion to illegal activities in 2023. This marks a 7.5% increase from the previous year’s R$ 410 billion, with losses quadrupling since 2014 from an estimated R$ 100 billion.

These figures represent the consolidated losses across 15 sectors of the Brazilian economy, amounting to R$ 302 billion, plus an additional R$ 139 billion that could have bolstered public coffers through taxes. The sectors most affected include clothing, beverages, and fuels, with tobacco not only facing massive losses but also being the most seized product by the Federal Revenue.

The FNCP highlights that the illegal market not only diminishes the profitability and competitiveness of affected sectors but also hinders the broader economic health by evading taxes, thereby undercutting prices and legal sales. This illicit advantage blocks higher tax collection and harms formal job creation and income opportunities for Brazilians.

Edson Vismona, president of the FNCP, describes the growth of the illegal market as “continuous and accelerated, more than quadrupling in the last decade.” He stresses the importance of a broader strategy that involves not just the productive sector but also governmental bodies to combat this scourge that harms the entire Brazilian society.

High Taxes Fuel Illegal Market

According to Vismona, one of the FNCP’s priorities is to draw attention to the need for policies that could reverse this situation. The illegal market is predominantly run by organized crime, which uses it as a significant funding source. In Rio de Janeiro, for example, militias and the “jogo do bicho” (illegal gambling) control the tobacco mafia, forcing local merchants to sell illicit brands