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publicationDecember 14, 2023

Health Taxes in the Lao PDR - Technical Note

Health taxes in Laos study cover features images of soft drinks, cigarette butts and beer glasses.

Shutterstock / successo images (left) / I love coffee (center) / atsarapong lertkrathok

Current Health Tax Situation

  • In Laos, tobacco, alcohol and sugar-sweetened beverages lead to significant disease, death and economic loss.
  • Health taxes are currently weak in Laos - they do not generate large revenue, do not deter consumption or reduce the harm these products have.
  • The tax reforms introduced in early 2024 will neither provide noticeable public health benefits nor generate significant revenue

Health taxes are excise taxes imposed on products that have a negative public health impact.

This technical note looks at the current tax situation for tobacco, alcohol and sugar-sweetened drinks in the Lao PDR and gives recommendations on how reform of health excise taxes could provide significant health and revenue gains. Excise taxation is considered one of the most cost-effective policy measures for reducing consumption of these products, while also raising meaningful revenue.

The report examines different tax options and structures, summarizing best practices from different countries. It looks at the negligible anticipated impact of the alcohol and tax increases announced in late 2013 and also the long-reaching influence of the investment license agreement enjoyed by cigarette manufacturers in Laos.

A full technical note and a two-sided summary of the study are both available.