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BRIEFMarch 29, 2023

Health Taxes

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Why Health Taxes?

Health taxes are taxes imposed on unhealthy products, such as tobacco, alcohol, or sugar-sweetened beverages. Consumption of these products is linked with many non-communicable diseases, such as heart disease, cancer, obesity, and diabetes.

The primary purpose of health taxes is to reduce consumption of these unhealthy products, by design they change the relative price of the targeted products relative to other products. When well designed — with a focus on the right rates, structures, base and supported by complementary administrative measures — they constitute one of the most cost-effective ways to curb the use of unhealthy products and save lives while raising much-needed revenue.

How Is the World Bank Supporting the Implementation of Health Taxes?

How is the World Bank Group supporting the implementation of Health Taxes
Government decisions on health taxes need to consider the potential impact on revenue, health, poverty incidence and benefits for redistributive programs. To do this effectively, multisectoral expertise is needed across fiscal policy, tax design and tax administration, health and nutrition, poverty and equity, and when relevant agriculture, social protection and other fields. The World Bank Group is one of the few development organizations that has such a wide range of expertise under one roof. The World Bank provides both analytical work and financing for projects that strengthen health taxes.

The Global Tax Program, an umbrella trust fund hosted by the Macroeconomics, Trade & Investment global practice, also supports implementation of health taxes.

Our Partners

SSB Partners
The World Bank recognizes the added value of working with partners to advance health tax implementation at the country level, and to develop important tools and research..

Among others, the World Bank is part of the Platform for Collaboration on Tax (PCT); the UN Interagency Task Force on NCDs (UNIATF-NCDs) under the WHO; the P4H Network; the Sustainable Financing for Health Accelerator (SFHA) under the auspices of the Global Action Plan for Healthy Lives and Well-being for All (SDG GAP); and the health taxes inter-agency working group (IAWG) which is an informal partnership of co-equal agencies. All these collaboratives bring together agencies with a common goal of advancing the health tax agenda.

More Publications that Make the Case for Health Taxes

Further resources are available from the the Platform for Collaboration on Tax, which includes links to the international toolkits on tax incentives, comparable (transfer) pricing and offshore transfer of assets.