"From this perspective, it is worth remembering that taxes are not only used by the State to collect revenue and fulfill its objectives, but are also instruments of financial, economic, or social policy, depending on the interests of the State itself, and thus can be used to encourage or discourage certain activities or social practices for the development of the country, provided that the constitutional principles governing taxation are not violated, since, ultimately, “both national and provincial taxing power constitutes an instrument of regulation, a necessary complement to the constitutional principle that provides for the general good, which leads to the certainly extrafiscal purpose of promoting the expansion of economic forces” (Rulings: 316:42) and, in this regard, they function as an instrument of fiscal policy with the aim of protecting certain assets such as the environment and the health of the population, among others.
In this regard, it is useful to highlight, by way of example, that according to the information document prepared in 2023 by the Inter-American Heart Foundation (FIC by its Spanish acronym), fiscal policies that increase taxes and, therefore, the price of tobacco have been recognized by the WHO as the most effective individual measure to reduce tobacco consumption and protect the health of the population, as they encourage people to quit, prevent relapses in consumption, and/or prevent children and adolescents from starting to smoke, since the latter are the sectors of the population that, due to the stage of life they are going through, do not have their own income and therefore have less purchasing power than adults. The report highlights that increasing tobacco taxes, which lead to higher prices, has a greater impact on the age of initiation of consumption."
The Argentine Supreme Court overturned lower court rulings that had invalidated provisions of Law 27,430, which established a “minimum tax” on cigarettes. Tabacalera Sarandí, a smaller producer of low-cost brands, argued that the measure discriminated against it and infringed constitutional guarantees of equality and property rights. The Court, however, found that the company had failed to demonstrate concrete harm. Emphasizing that taxation falls primarily within the legislature’s authority and that public health constitutes a legitimate extra-fiscal objective, the Court held that the provisions were consistent with international best practices aimed at reducing tobacco consumption. Accordingly, it dismissed the claim.