Brazil has experienced a persistent and substantial reduction in the prevalence of smoking in the population since 2006 due to increased taxes on tobacco and other tobacco control policies. Despite the effectiveness of these measures, however, the socioeconomic costs of smoking are still very high. The objective of this study is to perform a comprehensive cost-benefit analysis resulting from a one-time tax increase on manufactured cigarettes using estimated conditional price elasticity of cigarette consumption and probability of smoking by income and age quartiles. The study uses data from the National Household Sample Survey (PNAD) of 2008 and the National Health Survey (PNS) of 2013 and applies cross section, pooled, and probit estimations. The study distinguishes between legal and illegal cigarette markets by using the minimum cigarette price defined by the government. The results of the study indicate that a tax increase of 10% in the cigarette price generates significant social benefits by reducing tobacco spending and medical expenses on tobacco-related diseases and increasing future years of life and net income. We recommend, in one of the possible scenarios, a raise in PIS/COFINS to generate the 10 percent increase on manufactured cigarettes. Most importantly, this policy is highly progressive, as its economic effects are much stronger for the poorest than for the richest individuals according to the quartiles of income.