The 2022 Financing for Sustainable Development Report identifies a great financial divide between developing and developed countries. While rich countries were able to support their pandemic recovery with record sums borrowed at ultra-low interest rates, the poorest countries spent billions servicing debt, preventing them from investing in sustainable development. The crippling cost of debt financing for many developing countries has hamstrung their recovery from the COVID-19 pandemic, forced cutbacks in development spending, and constrained their ability to respond to further shocks.
The 2022 FSDR report discusses alcohol taxation as a solution for increased domestic resource mobilization and reducing health inequalities.
As Movendi International resources demonstrate, alcohol is an obstacle to 14 of the 17 SDGs, and alcohol taxation is a catalyst for achieving multiple SDGs.
Movendi International has been advocating for alcohol taxation to receive political attention commensurate with its potential to improve health, promote development and boost government revenue for many years.
In the European Region, alcohol taxation lags behind tobacco taxation but has the potential to save 130,000 in Europe every year. In February 2022, The WHO Europe NCD Advisory Council launched a signature initiative on alcohol taxation to support member states to harness the power of health taxes.
Taxation on tobacco, alcohol, and sugar-sweetened beverages are effective but underused policies of disease prevention and health promotion, according to the World Bank. They could also help mobilize additional government revenue to fund investments and programs that benefit the entire population and enhance equity. World bank expert Dr Sheila Dutta explains the win-win-win nature of pro-health taxes and links these effects to COVID-19 recovery and building sustainable health systems.
Recently, lower-middle-income countries (LMICs) such as Lesotho, Zimbabwe, Nigeria, Ghana , and the Philippines have begun exploring alcohol tax increases as well. More international organizations are waking up to the potential of evidence-based alcohol taxes to unlock triple benefits for people and societies.
Public health-oriented taxes on tobacco and alcohol are non-distortionary taxes. They have a triple benefit:
- Raise fiscal revenue,
- Reduce and prevent harm caused by tobacco and alcohol products, and
- Promote health and development by easing the health system burden and facilitating investments into healthcare and health promotion.
Besides revenue-raising objectives, the rationale for excise taxes on alcohol is to reflect their harmful external costs. The benefits of higher alcohol taxes are obvious for individuals and entire communities. The triple benefits result from:
- Reduced alcohol use,
- Preventing the initiation of alcohol use among children and youth, as well as
- Reducing the negative health, social, and economic consequences caused by the products and practices of the alcohol industry.