Skip to Main Navigation

Global Tax Program

Health Tax

Overview

In many low- and middle- income countries, high and growing consumption of unhealthy products- which contribute to non-communicable diseases including obesity – take a large toll, and have dire implications for both human capital outcomes and economic productivity.

More than 11.4 million premature deaths annually – or 20 percent of all global deaths– could be prevented by reducing consumption of tobacco, alcohol and sugar sweetened beverages (SSBs).

Further, economic pressures including higher food, fertilizer and energy prices, rising interest rates, and growth slowdown add up to a difficult fiscal equation for many developing countries.  While almost all countries increased overall government as well as health spending in the last few years, only a few of them—mostly high-income countries— can sustain these levels in the years ahead. Improving domestic resource mobilization, especially in a way that can broaden tax bases in a sustainable manner, will be central.

Why health taxes?

Health taxes are excise taxes imposed on products that negatively impact public health (e.g., taxes on tobacco, alcohol, SSBs). Because excise taxes can be used to target specific goods and services, they differ from other types of indirect taxes such as VAT or GST. In this sense, they are discriminatory: their special nature can be used to tax products that cause health related harms and generate negative externalities- harm to society; and negative internalities- harm to oneself.

As a policy tool, excise taxes are one of the most cost-effective ways to tackle consumption of these products: higher rates can lead to higher prices, and reduce affordability- curbing use and raising revenues, even in low capacity environments.

However, it is not just the tax rates that matter. Overall design of health taxes requires considering rates as well as the structure (i.e. ad valorem, mixed or specific) and base (i.e. value or volume, alcohol or sugar content). Further, the way that these taxes are implemented and enforced matters. Policy is only as good as the underlying tax and customs administration capacity that are in place to support collection. Developing efficient and effective tax administration ensures that the impact of health taxes is maximized and not undermined by tax avoidance and evasion, including illicit trade. Finally, the ecosystem in which health taxes evolves matter: Health taxes are part of larger tax systems, and recognizing this is critical to their success.

Our Work and Approach

Embedded in the Global Tax Program (GTP), the new Health Tax Workstream funded by the Government of Norway and Bloomberg Philanthropies bolsters the World Bank’s unique capacity to support countries in health tax reforms with a fiscal policy lens. From this vantage point, the program leverages World Bank expertise on taxation, close linkages with country economists, as well as multi-sectoral partners from outside and within the World Bank who are well positioned to support work at country and global levels.

Under the Health Tax Workstream, the majority of resources go to supporting country engagements across varying entry points, and with a focus on supporting core World Bank diagnostics such as Public Expenditure Reviews. This support seeks to connect with the broader tax reform dialogue at country level to ensure coherence. World Bank experts also thoughtfully synthesize lessons from these engagements and respond to other needs of countries that emerge on a demand driven basis to produce and disseminate learnings. Further, we leverage and participate in efforts with other partners in order to explore synergies and support strengthening the global knowledge base.

Last Updated: Sep 02, 2022

Events and Activities

Video cover for Health Taxes: Policy and Practice learning event
Learning Event

Health Taxes: Policy and Practice

On November 7, 2022, the Global Tax Program's Health Tax Workstream organized a learning event on the new book, "Health Taxes: Policy and Practice," in collaboration with WHO and Imperial College London.
Recording and Presentations Arrow
Four panel speakers sitting on the stage at the session on health taxes at the 6th Annual Health Financing Forum 2022
Event

The Side Event on Health Taxes at the 6th Annual Health Financing Forum

The World Bank activities supported by GTP Health Tax Workstream were presented in this session.
Read presentations Arrow

Videos

A slide from the video titled
click
VIDEO Jun 16, 2022

Improving health and budgets through health taxes

In this video from the 6th Annual Health Financing Forum on June 16, 2022, Evan Blecher, Global Tax Program, Macroeconomics, Trade & Investment Global Practice, World Bank, talks about how health taxes can help improve health while generating additional tax revenues.

Resources

Health Taxes: Policy and Practice book cover
Book

New Book | Health Taxes: Policy and Practice

This new book, published by World Health Organization and Imperial College London and contributed by the World Bank, discusses health taxes, their effects, policy design and tax administration considerations.
Read more about the book Arrow
A patient receives an intial vital signs check before seeing the doctor
Blog

Health taxes support better health outcomes and better tax revenues

Marcello Estevao, Global Director of Macroeconomics, Trade and Investment at the World Bank, discusses in this blog how supporting health tax reforms can help countries improve health and revenue outcomes.
Read the blog here Arrow
Sugar cubes in a glass next to a generic soda can
Blog

Is taxing sugar-sweetened beverages (SSBs) a sweet deal?

This blog discusses various aspects of SSB taxes.
Read the blog here Arrow
A man smoking on the side of a road
Blog

The seven salvos of (sin) taxes

Read more about seven lessons from international experience in implementing health taxes, or so -called "sin taxes"
See the full blog here Arrow
A woman standing behind a snack stand
Blog

Sugar-Sweetened Beverages and Snack Taxes

Learn how health tax policies enacted in Mexico and Hungary can inform similar measures around the world.
Read the blog here Arrow

Contacts

GTP Program Manager
Ceren Ozer
Email
GTP Health Tax Workstream Coordinator
Danielle Bloom
Email