The Slovak government is planning to raise taxes on alcohol, tobacco, and gambling in order to fund an urgent social support program for the most vulnerable people and families in Slovakia.
World class evidence shows that such health promotion taxes benefit the most vulnerable people and communities the most.

Slovak Minister of Labor, Social Affairs and Family, Milan Krajniak, has announced plans to better support the most vulnerable communities and groups who disproportionately affected by inflation and rising prices for essentials.

The plan of the ministry is to support people who are identified as vulnerable with a €100 one-time payment. Minister Krajniak would like the support to be paid by June 30.

Vulnerable groups include families in material need, families with children under 19 years of age, and low-income childless people. These are mainly the unemployed, carers receiving personal care allowances, personal assistants caring for the severely disabled and people of retirement age who are not entitled to a pension.

Minister Krajniak has already calculated that this one-time social support would cost the state budget €133 million. The plan is to balance this by raising some taxes in non-essential and harmful products and practices, such as alcohol, tobacco, and gambling, that are also harming the most vulnerable disproportionately.

All government coalition partners support the proposals, but funding has not yet been fully agreed.

Assistance will take three forms, with some families entitled to more than one: a one-time allowance, an increase in the child allowance to €100, or an increase in the tax bonus for low-earners to €100. High food and energy prices, inflation and, for some groups, the already unbearable rise in the cost of living have created a precarious situation for many people in Slovakia, like in other European countries.

Alcohol taxation is pro poor, pro equality, and pro social development

Taxes on tobacco, alcohol, sugar-sweetened drinks and snack foods benefit poorer households the most, according to landmark research from 2018.

In a series of five papers published in The Lancet evidence is presented showing collectively that taxes are a powerful response to rising rates of chronic diseases and an unimpeachable solution to tackling non-communicable diseases (NCDs).

Data from 13 countries shows that while changing the price of unhealthy products reduces consumption across the board, the impact differs according to socioeconomic status. The greatest health benefits from tax rises can be seen for people with a low socioeconomic status because they respond the most to price changes, and because they also suffer disproportionately from alcohol harm and NCDs in general.

The research shows that whilst wealthier households may face a bigger overall increase in expenditure when prices change, the effect is greater on lower income households because it represents a greater share of their overall spending.

 Governments must carefully assess the available evidence from their own countries and look at the tax system as a whole, including investing tax revenue in “pro-poor” programmes or subsidising healthy alternative products,” said Franco Sassi, Professor of International Health Policy & Economics at Imperial College Business School, in London, and Director of the Centre for Health Economics & Policy Innovation.

Franco Sassi, Professor of International Health Policy & Economics, Imperial College Business School, and Director, Centre for Health Economics & Policy Innovation

The papers published in The Lancet represent the most comprehensive analysis to date of evidence on expenditure, behaviour, and socio-economic status.

Bringing together data from across the globe, the five papers present strong evidence that taxes on unhealthy products have the potential to produce major health gains among the poorest in society who are disproportionately affected by diseases such as cancer, heart disease and diabetes.

Non-communicable diseases are a major cause and consequence of poverty worldwide,” says Dr Rachel Nugent, RTI International (Seattle, USA) and Chair of The Lancet Taskforce on NCDs and economics, as per Imperial College London reporting.

Responding to this challenge means big investments to improve health care systems worldwide, but there are immediate and effective tools at our disposal. Taxes on unhealthy products can produce major health gains, and the evidence shows these can be implemented fairly, without disproportionately harming the poorest in society.”

Dr Rachel Nugent, RTI International

Source Website: Dennik N Newsfilter, April 10, 2022 [Translated from Slovak]