The Task Force on Fiscal Policy for Health has released a new report, “Health Taxes: A Compelling Policy for the Crises of Today.” The report illustrates the significant potential of raising pro-health taxes for saving lives and raising revenue to invest in programs and services for people.

Health Taxes Are an Ideal Policy Solution for the Polycrisis Era

The Task Force on Fiscal Policy for Health has released a new report, Health Taxes: A Compelling Policy for the Crises of Today. The report illustrates the significant potential of raising pro-health taxes for saving lives and raising revenue to invest in programs and services for people.

If all countries raised their excise taxes on tobacco, alcohol and sugary beverages, leading to a 50% rise in prices for these health harming products that would prevent over 50 million premature deaths over the next 50 years, 88% of them in low- and middle-income countries.

And if all countries increased their excise taxes to raise prices of tobacco, alcohol and sugary beverages by 50%, it would generate US$3.7 trillion in additional revenue over five years. Of this, US$2.1 trillion would be raised in low- and middle-income countries (LMICs). If allocated to health, this would increase government health care spending by 12% globally and by 40% in LMICs.

In times of crisis, it is easy to lose sight of simple solutions that can give us more time, resources, and space to face difficult and complex problems. Raising health taxes is one of those simple solutions.”

The Task Force on Fiscal Policy for Health Report 2024

Remarkably, premature death is only one consequence of health harmful products, such as alcohol and tobacco. Lowering population-level tobacco, alcohol, and sugar consumption improves the quality of life for people while they are alive, preventing and reducing needless suffering from years lived using oxygen tanks, injuries from domestic violence and traffic crashes, or loss of limbs to amputation resulting from diabetes. 

Pro-health taxes as response to NCDs, dept, financial, and health financing crisis

Non-communicable diseases (NCDs), such as cancer, cardiovascular disease, chronic lung disease, diabetes, and mental health conditions, are the leading cause of the death in the world. Many of these deaths could be avoided by reducing smoking, alcohol consumption, and high-sugar diets. 

In 2018, Michael Bloomberg and Larry Summers (co-chairs) convened a Task Force on Fiscal Policies for Health to encourage the uptake of health taxes on tobacco, alcohol, and sugar-sweetened beverages (SSBs). The Task Force culminated in the publication of the final Task Force report.

Following the COVID-19 pandemic, a fiscal, debt, and health financing crisis has emerged in most low- and middle-income countries, opening up a new policy window for progress on health taxes.

Consequently, the co-chairs of the Task Force, including Mia Amor Mottley, reconvened the Task Force in 2024. The Center for Global Development was designated as the secretariat.

The final Task Force report, published in September 2024, reaffirmed that health taxes are a win-win policy, raising much-needed revenue and saving lives – but also found that countries are losing ground, necessitating a renewed effort to promote this policy.

Five key messages from the 2024 report

  1. Urgent action is needed to reduce the deaths and disease linked to the consumption of tobacco, alcohol, and sugary beverages, especially in low- and middle-income countries. 
    Each year, health harming produccts kill over 10 million people worldwide with economic costs of over $4 trillion. 
  2. Pro-health taxes are good for health and good for budgets, making them a unique and timely policy solution for the polycrisis of today. 
    The recent pandemic along with recession, inflation, and geopolitical conflicts have led to a health and fiscal crisis that can be mitigated by raising health taxes. Yet progress on alcohol and tobacco taxes have stalled, and taxes on sugary beverages are making progress but remain far too low. 
  3. The highest priority is for all countries to raise and reform tobacco taxes. 
    Of the three products considered in this report, tobacco continues to cause the most death and illness in the world and extensive guidance and country experience on effective tax policy is available. Despite this, tobacco tax policy has actually regressed in 76 countries; some 87% of the world’s one billion smokers now live in countries where cigarettes are equally or more affordable than in 2019. 
  4. Without decisive action today, millions of lives will be needlessly lost. 
    Taxes that generate a 50% increase in real prices of tobacco, alcohol, and sugary beverages would save 50 million lives over 50 years and could raise US$3.7 trillion globally over just five years, including US$2.1 trillion in low- and middle-income countries (LMICs). If allocated to health, this would increase government health care spending by 12% globally and by 40% in LMICs. These taxes are relatively quick to implement, reduce health systems costs, do not put economic growth at risk, and can thus help to alleviate the current fiscal crises. 
  5. The report authors call on all countries to urgently and substantially raise pro-health taxes, prioritizing tobacco, and continue increasing them above the level of inflation and economic growth. 
    This will require strong and sustained political will to counter the opposition from affected industries and their allies and should be actively supported by multilateral agencies. Governments will need to limit the industries’ interference with policy making, harness public support, and make the case that health taxes are a win-win for health and for revenues. 

Progress on pro-health taxes has stalled, urgent action is needed and possible

After calling for higher health taxes in its 2019 report, the Task Force, which reconvened in 2024, finds progress enacting health taxes has stagnated in most countries at a time when health systems are under considerable financial stress and raising revenue is particularly urgent.

The Task Force concluded raising pro-health taxes is a simple, cost-effective policy to immediately ease fiscal pressures, which have been exacerbated by the global pandemic, increasing poverty, and rising inflation and interest rates. The new report reemphasizes that taxes are underutilized given the impact they have in reducing preventable death and disease.

Progress on health taxes has significantly slowed over the past five years,” said Mia Amor Mottley, co-chair of the Task Force on Fiscal Policy for Health and Prime Minister of Barbados, according to Bloomberg Philanthropies.

Low- and middle-income countries, which have the highest burden of non-communicable diseases, like cancer, diabetes and heart disease, have the most to gain from increasing health taxes – both financially and in terms of number of lives saved. But for health taxes to be successful, governments must resist pressure from industry and harness support in favor of increasing health taxes above the level of inflation and economic growth.”

Mia Amor Mottley, Prime Minister of Barbados, and co-chair of the Task Force on Fiscal Policy for Health

Every year, disease linked to the consumption of tobacco, alcohol, and sugary beverages kill more than 10 million people worldwide, with economic costs of more than US$4 trillion. Research commissioned by the Task Force shows if all countries increased their excise taxes enough to raise the price of these three products by 50%, 50 million premature deaths would be prevented over the next 50 years.

Taxing products harmful to our health has proven to be a highly effective way to reduce death and disease, while also raising revenue that governments can use to improve public health,” said Michael R. Bloomberg, co-chair of the Task Force, World Health Organization Global Ambassador for Noncommunicable Diseases and Injuries, and founder of Bloomberg Philanthropies.

The Task Force’s latest research makes a compelling case to global policymakers. Raising health taxes now, especially on cigarettes, can help more countries save lives and address their most urgent fiscal challenges.”

How the new report addresses alcohol: destructive, costly, and growing 

Alcohol harm in the world

Alcohol consumption is another leading cause of death and disease. The human toll of alcohol harm is substantial: 2.6 million premature deaths in 2019, including over 700,000 from injuries. Alcohol disproportionately impacts youth, with the highest proportion (13%) of deaths due to alcohol in 2019 among those aged 20–39. 

Alcohol costs in the world

Research continues to accumulate confirming that alcohol consumption is a major risk factor for, among other health conditions and injuries, cancer, a wide range of injuries, and domestic violence. The economic costs due to alcohol harm are extremely large, estimated at 2.6% of global GDP. About two-fifths of these costs are direct health expenditures while the other three-fifths are productivity losses. 

Alcohol consumption in the world

Globally, alcohol consumption per adult (age 15 or older) has risen from about 5.9 liters of pure alcohol in 1990 to 6.5 liters in 2017 and is projected to increase further to 7.6 liters in 2030. Over the same period, the share of adults who consume alcohol has also risen from 45% to 47% and is projected to reach 50% in 2030.

Alcohol consumption has been rising uninterruptedly for decades with much less governmental and research attention than is warranted.”

The Task Force on Fiscal Policy for Health Report 2024

The state of alcohol taxation in the world

Despite its human and financial cost, alcohol is not properly taxed.

  • Fewer governments reported applying excise taxes on alcohol (149) than tobacco (183).
  • The average excise tax share of alcohol prices is only about 17% compared to 42% of tobacco prices.
    • The average excise tax as a share of price has not changed much in recent years, if at all.
  • It is not surprising, therefore, that government tax policies regarding alcohol have not kept pace with inflation or real income growth. Consequently, alcohol has become more affordable in most countries for which data is available. 

Best practice example Lithuania: sustained action on alcohol taxes

Since 2014, Lithuania has repeatedly and substantially increased excise taxes on beer, wine, and liquor. As a result, per capita alcohol excise tax revenue nearly doubled from 2015 to 2022, and by 2022 accounted for almost 3% of the country’s total tax revenue (about US$490 million or US$176 per capita).

At the same time, alcohol consumption decreased. The largest single tax increase (in 2017) more than doubled taxes on beer and wine (94,95): this tax increase alone averted an estimated 1,452 deaths in the following year.

Other research documented the effect of the tax on lowering cancer and suicide rates. Moreover, these gains went disproportionately more to those in lower socioeconomic groups, pointing to the broadly progressive nature of these taxes. 

Per capita alcohol excise tax revenue and recorded alcohol consumption in Lithuania, 2011-2021, Source: Adapted from J. Manthey et al. 2024 

Health taxes have significant short-term revenue potential 

Alcohol taxation would generate an additional US$2.4 trillion in revenues and reduce consumption by 30%. Low- and middle-income countries account for the largest share of all of these potential revenues: 56% in the case of alcohol. This is a consequence both of their large share of the world’s population and of global consumption. 

For alcohol, the revenue generated would be about US$1.3 trillion and consumption would fall by about 12 percent. 

Increasing any tax is always difficult but slow economic growth and crippling debts are chipping away at the budgets of many low- and middle-income countries,” said Lawrence H. Summers, co-chair of the Task Force, Former Secretary of the Treasury of the United States, and Board Chair of the Center for Global Development.

Increasing tobacco taxes are a win-win for health and for revenues.”

Lawrence H. Summers, co-chair of the Task Force, Former Secretary of the Treasury of the United States, and Board Chair of the Center for Global Development

The Task Force on Fiscal Policy for Health calls on all countries to significantly increase health taxes, improve their design, and strengthen enforcement to reduce consumption of unhealthy products and prevent millions of unnecessary death and disease.

Strategies to Raise Health Taxes 

Framing the issue may be the single most important aspect of any strategy. Winning the debate against industry opposition often hinges on whose narrative becomes most salient. The fundamental challenge for governments is to highlight the benefits of health taxes and overcome general opposition to higher taxes. 

Mobilizing support is essential for raising health taxes, and framing the debate is one part of the process. Governments seeking to raise health taxes have natural allies in professional groups like tax justice groups, cancer, lung and heart associations, grassroot public health advocacy initiatives, youth groups, and patient and survivor groups (130). Additionally, other countries’ experiences can serve as a powerful motivator; countries have successfully benchmarked their tax increase efforts to their regional and economic peers. 

Strategic communication is essential if the narrative provided to justify health tax increases is going to become the dominant frame for debate. Coalition partners are important to this process. Governments have also enlisted the media to spread information by providing the research, evidence, and examples that support health taxes (131). Exposing industry strategies to oppose health taxes is important, both to neutralize their efforts and to delegitimize their participation. Carrying out this debate in public can be an effective option. 

Actively counter industry opposition. Explicit tactics are needed to weaken the industry’s resistance to health taxes. First, governments must legislate and enforce restrictions on efforts by industry to influence policymaking and compromise government officials. Second, governments can harness popular sentiment, both in support of better health and in opposition to industries profiting from human suffering. Third, governments can counter the tobacco, alcohol, and sugary beverage industries’ effort to co-opt other industries by focusing on the economic benefits of a healthier workforce and consumers with more purchasing power. Finally, industry’s false and misleading arguments must be confronted directly with the evidence, and their reports publicly discredited by exposing that they are self-serving and typically secretive about sources and methods. 


Task Force on Fiscal Policy for Health

The Task Force on Fiscal Policy for Health convened in 2018 to address the growing global burden of noncommunicable diseases (NCDs). Co-chaired by Mike Bloomberg, Prime Minister of Barbados Mia Amor Mottley and renowned economist Larry Summers, and composed of fiscal policy, development, and health leaders from around the world, the Task Force works to draw attention to the role of fiscal policies to address the growing burden of NCDs worldwide.

The Task Force on Fiscal Policy for Health first convened in 2018 to address the growing health and economic burden of noncommunicable diseases such as heart disease, cancer, and diabetes through fiscal policies.

NCDs are the leading cause of death in the world, killing more than 40 million people each year. 70% of NCD deaths occur in low- and middle-income countries, imposing a strain on health care systems, contributing to poverty, and obstructing development. Tobacco use, obesity, and alcohol consumption are three leading risk factors for the development of NCDs.

In 2019, the Task Force released an inaugural report concluding that health taxes were a highly effective but greatly underutilized policy tool to improve health outcomes, save lives and raise domestic resources. The report concluded that if countries increased their excise taxes to raise prices on tobacco, alcohol, and sugary beverages by 50%, over 50 million premature deaths could be averted worldwide over the next 50 years while raising over US $20 trillion of additional revenues.

Since the initial report, the world is experiencing a protracted health and fiscal crisis as a result of the COVID pandemic. Despite the potential for health taxes to address both the health and fiscal crisis, little progress has been made.

In response, the Task Force released a new report in 2024 highlighting the lack of progress and urgent need to raise health taxes to immediately ease fiscal pressures, reduce the burden of NCDs on struggling healthcare systems and most importantly save lives.


Source Website: Bloomberg Philanthropies