Securing Somalia’s health: leveraging sin tax revenues to drive universal health coverage and financial protection for lifesaving care in Somalia’s health system-scoping review

Abstract

Introduction

Global non-communicable diseases account for 74% of deaths worldwide, causing 15 million premature deaths each year, and the WHO warns this could rise to 55 million by 2030. Universal Health Coverage (UHC) is therefore central to SDG 3.8, aiming to ensure access to essential services without financial hardship. In Somalia, where tax revenue is low, increasing sin-tax rates could boost fiscal capacity for health initiatives. This study aims to explore how sin-tax revenues can serve as a sustainable financial mechanism to address Somalia’s health-financing challenges, promote UHC and enhance financial protection while examining global best practices and the political economy of implementation in fragile states.

Methods

This review followed the PRISMA-ScR framework for scoping reviews and synthesised evidence from academic and grey-literature sources on sin-tax (health taxes) revenues, health financing and UHC in fragile states—particularly Somalia. An initial 194 records were identified; after screening, 92 studies met the inclusion criteria for full-text analysis.

Results

In Fiscal Year 2024 Somalia collected US $ 369.35 million in revenue, a 12% rise from 2023; the additional US $ 40 million equals 0.35% of 2024 GDP. Estimates show that sin-tax instruments on tobacco and alcohol yield 0.01%–0.5% of GDP in fragile states. Sin-taxes in Somalia such as the khat tax in Somaliland, which generates about US $ 2 million annually demonstrate tangible scope to expand public-health financing while curbing harmful consumption.

Conclusion

Somalia’s path to UHC remains constrained by reliance on external aid, out-of-pocket spending and a narrow domestic tax base. Well-designed sin-tax instruments on tobacco, alcohol, sugary drinks and khat especially where revenues are partially earmarked (hypothecated) for priority health services offer a dual opportunity: they curb risk-laden consumption and create predictable revenue that can be earmarked for essential services such as primary care, maternal-and-child health and NCD prevention. Evidence from peer countries shows that high rates, automatic inflation adjustment and robust enforcement are critical for maximizing both health gains and fiscal space.

Introduction

Global non-communicable diseases (NCDs) account for 74% of deaths worldwide, leading to 15 million premature deaths annually among individuals aged 30–70, with the WHO warning that such fatalities could rise to 55 million by 2030 [1–3]. NCD primarily results from lifestyle or environmental factors rather than genetic inheritance, distinguishing them from communicable diseases caused by infections viral, bacterial, or fungi [4]. Universal Health Coverage (UHC) is a crucial component of Sustainable Development Goal 3 (SDG 3.8) by 2030 [5–7], by 2030 aiming to ensure that all individuals have access to essential health services without experiencing financial hardship [7, 8]. Progress toward UHC is tracked through various indicators across countries of all income levels. In parallel, strategies such as sin taxes (health taxes), which impose excise taxes on harmful goods like tobacco, alcohol, and sugar-sweetened beverages, are used to reduce consumption and generate revenue for public health programs [9, 10]. Since their introduction in the eighteenth century, primarily targeting tobacco, sin taxes (health taxes) have proven effective in curbing harmful behaviors, contributing to healthier populations and supporting the broader goals of UHC [10, 11].

The term health taxes (also referred to as sin taxes or excise taxes on health-harmful products), Health taxes on these products aim to reduce consumption, promote health equity, and fund UHC while implementing cost-effective public health measures [12–14]. Tobacco and alcohol are leading preventable causes of death and disease, and the excessive consumption of sugar-sweetened beverages contributes significantly to conditions like obesity, type 2 diabetes, and other metabolic disorders [15, 16]. The World Health Organization’s "3 by 35" initiative (Mobilize countries, Support country policies and Build commitment & partnerships) encourages countries to raise taxes on tobacco, alcohol, and sugary drinks by 50% by 2035, advocating for these taxes to combat chronic diseases and generate vital revenue [17]. When applied effectively, such taxes have been shown to lower consumption and boost public health financing, particularly when the structure is simple, tax rates are high, and revenues are directed to priority health areas [11, 18].

In this paper, it is assumed that revenues from hypothecated health taxes, which are derived from excise taxes on harmful products, would be allocated to the health sector. These funds can support initiatives like Universal Health Coverage, Non-Communicable Disease prevention, or primary care [19–21]. Proponents argue that earmarking these taxes enhances transparency, improves political acceptability, protects health spending during fiscal challenges, and strengthens the social contract by connecting taxation with tangible health benefits [22, 23]. However, Critics warn that strict hypothecation can limit budgetary flexibility for finance ministries, create rigidities due to fluctuating revenues, and, particularly in cases of poor public financial management, does not ensure efficient or equitable use of funds [24].

In Africa, harmful imports of tobacco, alcohol, sugary beverages, and stimulants contribute to high rates of smoking-related diseases, alcohol-related health issues, obesity, type 2 diabetes, and mental health problems, The increasing importation of highly processed foods, rich in unhealthy fats, sugars, and salts, also increases the prevalence of non-communicable diseases [9, 25–28]. Nearly 90% of African countries have implemented at least one health tax, WHO with projections indicating these taxes could save 50 million lives over 50 years and raise $2.1 trillion in five years for low- and middle-income countries, equating to 40% of their total health expenditure [29], and tax-to-GDP ratio rose from 15.5% in 2019 to 16.0% in 2022, though it remains lower than that of Asia–Pacific, Latin America, and OECD countries [30]. In response, African nations are increasingly focusing on domestic resource mobilization to close the health financing gap and advance UHC, with innovative mechanisms like targeted excise taxes [31, 32], South Africa's 2018 Health Promotion Levy on sugary drinks has led to both health improvements and changes in consumer behavior, evidenced by increased post-tax prices and reduced sugary drink consumption [15, 33]. However, Sub-Saharan Africa still faces significant challenges in reducing catastrophic health expenditure, requiring comprehensive public financing reforms, risk pooling, and financial protection policies [34].

Somalia's imports of harmful products, such as khat, tobacco, sugary beverages, and processed foods, pose significant public health risks. These imports contribute to respiratory diseases, cancer, obesity, diabetes, and non-communicable diseases, putting a growing burden on the health system and affecting individual health [35–37], Global Burden of Disease 2019 estimates show that NCDs now account for a growing share of deaths and DALYs in Somalia and will continue to increase to 2030, signaling an early but clear epidemiological transition alongside the still-high burden of communicable and maternal-child conditions [36]. The efforts to enhance tax collection are crucial for decreasing dependence on foreign aid, though obstacles like infrastructure deficits and political instability persist [38–40]. The country’s low tax-to-GDP ratio underscores fiscal constraints, but recent reforms aim to expand the tax base, reduce dependency on foreign aid, and increase domestic revenues by 2027 [41–43]. Estimates show that "sin tax" instruments on tobacco and alcohol yield 0.01% to 0.5% of GDP in fragile states. In Somalia, where tax revenue is low, increasing these taxes could boost fiscal capacity for health initiatives [32], and real GDP is expected to grow by 3.7% in 2024 and 3.8% in 2025 [44]. In Fiscal year2024, Somalia's government collected $369.35 million in revenue, a 12% increase from $330 million in 2023, surpassing the 0.3% GDP growth target. The additional $40 million represents 0.35% of the 2024 GDP (Fig. 1) [45, 46].

Fig. 1.

Domestic revenue growth 2020–2024, Somalia

Despite the Somalia's National Transformation Plan 2025–2029 prioritizes Universal Health Coverage, focusing on strengthening primary healthcare, reducing maternal mortality, and professionalizing the health workforce. The plan is supported by the National Medicines Regulatory Authority and the National Health Professionals Council to ensure quality and accountability [47]. Somalia’s path toward UHC is shaped by the legacies of post-conflict state-building, limited fiscal space, and heavy dependence on aid [7]. The healthcare system struggles with infrastructure challenges, political instability, and substantial out-of-pocket expenses, particularly affecting vulnerable populations, Leveraging sin taxes in Somalia could not only discourage unhealthy behaviors but also generate revenue for health initiatives, aligning with the Somali Roadmap for UHC while improving access to quality healthcare(Fig. 2) [7, 48, 49]. If linked transparently to the Essential Package of Health Services (EPHS) 2020 priorities such as primary care, maternal and child health, and essential medicines, this could bolster public support and alleviate out-of-pocket burdens [50]. This study scoping review aims to explore how sin tax revenues can serve as a sustainable financial mechanism to address Somalia’s health financing challenges, promote UHC, and enhance financial protection, while also considering global best practices and the political economy of implementing such taxes in fragile states.

Fig. 2.

Pathway from Sin taxes to universal health coverage in Somalia

Methodology

Study area and design

Somalia, a low-income federal republic in the Horn of Africa, faces significant health financing challenges due to political instability and limited fiscal capacity [7, 51]. However, achieving Universal Health Coverage (UHC) is crucial for improving access to essential health services [52, 53]. The research explores the use of sin tax revenues, specifically tobacco, alcohol, and sugar-sweetened beverages, as a sustainable health financing mechanism to address these gaps. The study focuses on Somalia's federal structure and the division of health governance between the Federal Ministry of Health and state ministries. With a population of around 18.1 million, most live in urban areas with limited access to healthcare due to political instability and inadequate infrastructure [54, 55].

Data collection strategy and data extraction process

The study conducts a Scoping review guided by PRISMA-ScR (Fig. 3) [56], synthesizing findings from various sources, including peer-reviewed articles, government reports, and grey literature concerning sin tax revenues, health financing, and Universal Health Coverage (UHC) in fragile states, notably Somalia. It utilized primary data from databases such as PubMed, Scopus, Web of Science, and Google Scholar, alongside reports from WHO, UNICEF, and the World Bank. Initially, 199 articles were identified, and after removing duplicates and screening titles and abstracts, 143 articles were assessed for eligibility. Ultimately, 107 studies were selected following a thorough review of the full texts (Fig. 3).

Fig. 3.

PRISMA flow diagram selection flowcharts

The data collection strategy for this review involved a comprehensive search between March and August 2025. Key terms such as ("sin taxes" OR "health financing" OR "Universal Health Coverage*" OR "fragile states" OR "Somalia health system") AND ("sin tax revenues" OR "financial mechanism*" OR "health system strengthening" OR "health financing challenges") AND ("UHC" OR "financial protection" OR "sustainable finance*" OR "political economy" OR "best practices") AND ("implementation" OR "fragile states" OR "Somalia") AND ("global best practices" OR "political economy" OR "revenue generation" OR "taxation system*").were used to filter relevant articles. A thematic analysis approach was employed, using NVivo software for coding and categorizing data into the following thematic areas:

1. Somalia’s Health Financing Challenges and Sin Tax Potential

2. Sin Tax Revenues as a Sustainable Health Financing Tool

3. Global Best Practices in Sin Tax Utilization for UHC

4. Political Economy of Sin Tax Implementation in Fragile States

5. Policy Recommendations for Optimizing Sin Taxes for Health in Somalia

Inclusion criteria

• Publications from 1990–2025.

• Studies on sin taxes, health financing, and UHC in Somalia or similar states.

• Peer-reviewed research, government reports, NGO publications, and reviews on health impacts of sin taxes and climate-sensitive outcomes.

Exclusion criteria

• Non-English publications.

• Editorials and opinion pieces lacking empirical evidence.

Thematic analysis

Somalia’s health financing challenges and sin tax potential

Overview of Somalia’s health financing landscape

Somalia faces numerous challenges in securing sustainable financing for its health system, exacerbating its struggle to provide universal health coverage (UHC) [7, 54, 57]. Somalia's narrow tax base, informal economy, and lack of robust domestic financing mechanisms hinder the government's ability to raise funds and improve health outcomes [49, 58, 59]. Recently implemented a mandatory 5% Value-Added Tax VAT-style sales tax across the nation starting and applicable to all invoices [60]. The country’s health financing landscape is hindered by an insufficient public health budget, a limited tax base, political instability, and the reliance on external aid [61, 62], and the health financing system is characterized by a heavy reliance on external aid, out-of-pocket payments, and remittances, with limited contributions from domestic government revenue [49].

Somalia Humanitarian Fund’s 2024 consolidated financial report, the health cluster absorbed US$ 72.3 million of the Fund’s overall US$ 716 million portfolio roughly 10 percent financing more than 100 UN- and NGO-implemented projects (maternal and neonatal care, outbreak control, blood-transfusion services, emergency coordination, etc.) and disbursing 95.6 percent of its allocation, underscoring both high delivery efficiency and the sector’s ongoing dependence on external humanitarian aid for core service provision [63]. 2015–25, Somalia’s national budget surged almost ten-fold, and the health allocation rose from < 1% to about 7% of spending after a brief dip in 2019 while foreign-grant reliance stayed in the low single digits [64]. significantly lower than the sub-Saharan Africa average of 38.8%. The country's health expenditure per capita was $16.6 in 2020, compared to $94.7 for sub-Saharan Africa. This financial structure has led to a fragmented health system with limited access to essential services [49].

Households in Somalia face significant health care costs, with out-of-pocket spending comprising 44–45% of total health expenditure, creating financial risk for families [49]. A major barrier to accessing care, highlighted by the Health Sector Strategic Plan, is that 65% of women aged 15–49 report financial accessibility issues [65]. Healthcare provision is critically constrained in rural and conflict-affected areas lack trained staff because training centers are urban-based, while an NGO-dominated, poorly overseen delivery system hampered by weak infrastructure and keeps facilities under-supplied and access to care highly uneven [66] (Table 1).

Table 1.

Key Health Financing Indicators in Somalia Compared With Sub-Saharan Africa Benchmarks (WHO/World Bank Standards)

Indicator (WHO/WB Standard Metric)	Somalia (Latest Available)	Trend (2015–2024)	Sub-Saharan Africa Avg	Interpretation
Current Health Expenditure (CHE) as % of GDP	~ 2.6%	Slight ↑ but remains low	~ 5.1%	Somalia spends a small share of its national income on health relative to SSA norms
Health Expenditure per Capita (US$)	US$ 15–16	Marginal increase	US$ 94–95	Per-person spending remains far below regional average
Government Health Expenditure as % of CHE	~ 10–12%	Gradual ↑ after 2020 reforms	~ 38–40%	Indicates limited public financing capacity
External Health Expenditure as % of CHE	~ 44–45%	Stable/high dependency	~ 25–30%	Somalia relies heavily on donor and humanitarian funding
Out-of-Pocket (OOP) as % of CHE	~ 44–45%	Persistently high	~ 35–36%	High financial burden on households
Domestic General Government Revenue (% of GDP)	Low/narrow tax base (~ 7–9%)	↑ following tax reforms	Higher in SSA	Constrains fiscal space for health
Share of National Budget Allocated to Health (%)	~ 6–7%	↑ from < 1% in 2015	SSA target ≥ 15% (Abuja)	Health remains under-prioritized in public spending
Catastrophic Health Expenditure Risk	High — OOP dominant	No major reduction	Lower in SSA pooled systems	Many households face financial hardship

Despite potential fiscal and public-health gains, several implementation risks were identified across comparable fragile-state contexts, including weak tax-administration capacity, limited revenue-tracking systems, informal cross-border trade, governance constraints and the risk of inequitable tax burden among poorer households. These institutional and equity considerations are highly relevant to Somalia and must be addressed in the design of any future health-tax mechanism [67, 68].

Sin tax revenues as a sustainable health financing tool

Sin taxes” (also referred to as health taxes or public health levies) are excise taxes imposed on goods or activities deemed harmful to health, such as tobacco, alcohol, sugar-sweetened beverages, or other unhealthy commodities. The dual rationale is: (a) health — to discourage consumption of harmful goods and thus reduce disease burden, and (b) financing — to generate additional government revenue that can be earmarked (or allocated) to health or social programs. Mechanistically, sin taxes increase the price of targeted goods, which depending on the price elasticity of demand leads to reduced consumption and thereby lowers exposure to risk factors for noncommunicable diseases (NCDs). Simultaneously, the tax generates a stream of revenue that governments can channel toward health system needs (e.g. preventive programs, treatment, infrastructure, subsidies) [11]. To enhance the effectiveness and fairness of sin taxes, several key design features are essential: simplicity and transparency to minimize evasion and administrative burden; automatic adjustments to maintain real value; earmarking revenues for health or social protection to boost public acceptance and impact; addressing equity issues due to the regressive nature of sin taxes; and ensuring effective governance and stakeholder engagement to counteract industry resistance. Ultimately, sin taxes serve as both a public health measure and a strategy for increasing domestic resource mobilization for sustainable health systems and universal health coverage [69].

Sin taxes in Somalia, particularly the khat tax in Somaliland, present opportunities to boost public health financing, currently at low levels. These taxes can help recruit mental health professionals and enhance health infrastructure. Other possible targets include tobacco and sugary drinks, though their effectiveness hinges on consumption rates and political will. While these taxes may create additional fiscal space, they should not substitute for comprehensive health financing reforms [70]. Long-term sustainability of sin taxes can generate stable financing and public health benefits by reducing the burden of non-communicable diseases (NCDs) and accelerating progress toward universal health coverage (UHC) [71, 72]. These taxes can promote preventive care, encourage healthier behaviors, and strengthen health system infrastructure. However, sustainability risks include potential revenue decline, reliance on single commodities, industry resistance, and conflicts with broader budgetary needs [19, 73]. It is essential to integrate sin taxes into a comprehensive health financing strategy to maximize their benefits in fragile settings like Somalia [74].

Global best practices in sin tax utilization for UHC

The implementation of sin taxes on products like tobacco, alcohol, and sugary beverages in low- and middle-income countries (LMICs) aims to generate revenue while promoting public health. These taxes have been used effectively to support Universal Health Coverage (UHC), although the outcomes differ based on the specific context, tax rates, and revenue allocation [75]. These international experiences demonstrate how sin taxes can serve as a strategic tool for both population health improvement and fiscal consolidation in resource-constrained settings. Recent World Bank Public Finance Review guidance highlights that well-designed health taxes on tobacco, alcohol, and sugar-sweetened beverages can simultaneously improve population health, strengthen excise-tax administration, and expand sustainable domestic revenue, particularly in low- and middle-income and fragile-state contexts reinforcing their relevance for Somalia’s fiscal and UHC reform agenda [76].

In 2018, South Africa introduced a Health Promotion Levy (HPL), a tax on sugar-sweetened beverages aimed at addressing obesity and non-communicable diseases such as diabetes and heart disease. The levy imposed a charge of 2.1 cents per gram of sugar exceeding 4 g per 100 ml, with objectives to decrease sugar intake and promote healthier eating habits. Its effectiveness is highlighted by a 29% reduction in the per capita purchase of taxed sugary drinks, showcasing how economic incentives can alter consumer behavior [77]. In its first year, HPL generated over 2 billion South African rand US$1.9bn, funding various public health initiatives focused on tackling obesity and diet-related illnesses [78]. These initiatives include enhanced health education, encouragement of healthier food choices, and increased accessibility to nutritious food in low-income communities. The success of the HPL aligns with global health recommendations from organizations like WHO, supporting fiscal strategies to reduce the consumption of unhealthy products and improve health outcomes. Additionally, the initiative has drawn international attention as a potential model for other countries considering similar tax measures [79]. However, challenges remain regarding the regressive nature of the tax, which could disproportionately affect low-income households. Nonetheless, South Africa's HPL demonstrates its potential as a successful approach to promote public health while simultaneously generating vital funding for health programs [4, 80].

Oman introduced excise taxes in 2019 on products such as tobacco and sugary drinks to enhance public health and fund health initiatives [81]. This measure aims to lower consumption rates and is part of a global strategy targeting non-communicable diseases (NCDs) including heart disease and obesity [82]. The Excise Tax Law in Oman outlines various excisable goods, imposing a 100% tax rate on tobacco, energy drinks, and special purpose goods, while carbonated drinks are taxed at 50%. Tax is calculated based on the higher standard price or retail sales price declared by relevant parties. Registration for excise tax is mandatory for producers and importers, with the appointment of a responsible person required. Tax is due at import, release for consumption, and personal consumption in special zones. Exemptions apply to diplomatic bodies and passengers under specific conditions [81]. The taxes in Oman are expected to notably impact lower-income populations, as they are more responsive to price changes. Financial projections indicate that these excise taxes could yield millions of Omani Rials, earmarked for public health initiatives aimed at reducing NCD burdens and funding anti-smoking campaigns, along with education about the dangers of sugary drinks. Revenues generated will also be directed towards improving healthcare infrastructure, especially in rural areas where lifestyle-related diseases are prevalent [83].

Ghana's health taxation strategy, notably increasing tobacco [84] tax from 23 to 38% of retail price by 2024, exemplifies effective public health financing for low- and middle-income countries. This move has significantly boosted tax revenue [29]. Implementing a specific excise tax of GH₵4.00 per pack could further raise cigarette prices by 128% and reduce consumption by 27%. The government’s dedication to health taxes is evident in its Non-Communicable Disease Policy, which aims to create dedicated funds for health initiatives. With 72% public support for higher tobacco taxes, Ghana's approach highlights the potential of health taxes to generate sustainable revenue, reduce harmful product consumption, and promote universal health coverage [85–87].

The Philippines 2012 Sin Tax Reform Act marked a significant transformation in public health financing through the imposition of higher taxes on tobacco and alcohol [88, 89]. This initiative aimed to expand health insurance coverage and prioritize health outcomes rather than mere revenue generation, aligning with the goal of achieving Universal Health Care. The legislation introduced substantial increases in excise taxes—69% for tobacco and 31% for alcohol—carefully balancing the financial burden to minimize industry pushback while addressing the serious health risks linked to tobacco use. The fiscal impact was immediate and notable; in the year following the reform, tobacco tax revenues skyrocketed by 114%, and alcohol tax collections saw a 38% increase. These funds were chiefly allocated to health initiatives, resulting in a remarkable 57% rise in the budget for the Department of Health. This financial influx spurred the rapid expansion of PhilHealth, the national health insurance program, leading to a dramatic increase in health insurance coverage from 52.6% in 2011 to 89% in 2022. Consequently, the Sin Tax Reform significantly improved financial access to healthcare for millions of Filipinos, exemplifying the effectiveness of targeted tax policies in promoting public health objectives [89].

Rwanda's 39% excise tax on soft drinks aims to generate revenue and combat non-communicable diseases (NCDs). Introduced in 2018, the tax applies to all soft drinks regardless of sugar content, which may not effectively lower sugary beverage consumption. It exemplifies the use of sin taxes in low- and middle-income countries for public health improvements and revenue generation [90], particularly those linked to poor diets such as obesity, diabetes, and heart disease [91]. This policy aims to address Rwanda's public health issue of non-communicable diseases (NCDs) by implementing a sin tax on sugary drinks. This tax has successfully decreased sugary beverage consumption and increased revenue for public health efforts, such as awareness campaigns and healthcare infrastructure. Early evidence shows positive outcomes, highlighting the potential of sin taxes as a preventive health measure and financial support for health systems in low- and middle-income countries [92].

The United Kingdom has escalated its implementation of "sin taxes"—taxes on tobacco, alcohol [93], and unhealthy foods to address a projected £51 billion fiscal deficit. These measures, announced by Chancellor Rachel Reeves in September 2025, aim to enhance public health funding while discouraging consumption of products associated with chronic diseases. The government anticipates that the increase in excise duties will generate approximately £20 billion in additional revenue, contributing to efforts to bridge the fiscal gap. This initiative aligns with the World Health Organization's recommendations for economic measures to improve public health outcomes. Economists predict that this additional revenue will bolster critical public services, including a £29 billion real-terms increase in NHS funding over the next four years. Evidence indicates that heightened taxes on unhealthy products can lead to decreased consumption, potentially reducing diet-related diseases and healthcare costs. However, there are concerns regarding the regressive nature of these taxes, which may disproportionately impact lower-income households. To alleviate such effects, the government is considering complementary policies like subsidies for healthier foods and targeted support for vulnerable populations. Ultimately, the UK's enhanced sin taxes represent a strategic effort to tackle public health issues and fiscal challenges simultaneously, promoting a healthier populace while ensuring the sustainability of essential services [94] Table 2.

Table 2.

Analysis of Global Best Practices in Sin Tax Utilization for Universal Health Coverage (UHC)

Somaliland, an administratively self-governing region within Somalia, has introduced a khat excise levy implemented at both municipal and customs-entry levels, primarily justified on social and public-health grounds — particularly its links to reduced productivity, household income diversion, and mental-health stressors. Available fiscal reports and credible public-finance estimates indicate that this khat tax generates approximately USD 2 million annually, making it one of the most substantial excise revenue streams within local government portfolios in Somalia. Although the levy was not formally established as a ring-fenced health tax, emerging evidence suggests that portions of the revenue have supported municipal sociaaxl-service functions, including mental-health and community-welfare activities. The Somaliland experience, situated within Somalia’s broader fiscal and governance context, demonstrates both the political feasibility and administrative collectability of khat taxation in a fragile-state environment and provides an important policy learning opportunity for Federal Government adaptation and scale-up [70].

Political economy of sin tax implementation in fragile states

The implementation of sin taxes in fragile states presents distinct political, social, and economic challenges due to unstable governance, weak institutional frameworks, and competing stakeholder interests [75, 95]. These taxes, typically levied on alcohol, tobacco, and sugary products, are aimed at improving public health and generating revenue, but they are often met with resistance due to the political environment in fragile states [75]. The political landscape in fragile states is marked by instability, weak rule of law, and a lack of effective governance structures. These factors complicate the implementation of sin taxes and lead to challenges in both political support and administrative capacity. In fragile states, governments may lack the ability to enforce new tax policies or collect taxes efficiently [96, 97]. Key stakeholders in fragile states, including government officials, local elites, multinational corporations, and informal sector actors, often have conflicting interests regarding sin taxes [98]. Multinational corporations producing sin goods like tobacco and alcohol may oppose higher taxes to protect profit margins, while local elites may resist due to concerns over revenue and influence. Political leaders might refrain from implementing such taxes to avoid alienating constituent’s dependent on these goods for economic survival. Therefore, the political challenges involve balancing these competing interests amidst weak institutions and governance [99].

The implementation of sin taxes in fragile states poses significant social and economic implications. Socially, while aimed at reducing harmful consumption (e.g., tobacco, alcohol) to improve public health, the effectiveness of these taxes may be limited due to lack of healthcare and education resources [100]. Poor populations, most impacted by these taxes, might not adjust their consumption patterns, thus failing to achieve desired health outcomes. Economically, sin taxes can diversify government revenue, vital for states dependent on aid; however, their long-term impact could diminish tax revenue as consumption decreases, and informal markets expand. Furthermore, the burden of these taxes can intensify inequality, disproportionately affecting lower-income groups, potentially destabilizing the political environment and exacerbating social discontent [12, 101]. Evidence from LMIC contexts indicates that health tax risks can be mitigated by strategic framing, inter-sectoral coalitions, and aligning with fiscal policy reform. Countries that position health taxes around equity, health protection, and public finance stability tend to gain political acceptance and resist industry opposition [102].

Policy recommendations for optimizing sin taxes for health in somalia

In fragile fiscal and governance environments such as Somalia, introducing simultaneous tax increases across multiple product categories may be politically and administratively unrealistic. Consistent with lessons from other LMIC settings, a phased and sequenced approach is likely to be more feasible, beginning with products that present the strongest health burden and clearest revenue potential — such as tobacco — and subsequently expanding to alcohol, sugary drinks, and khat once institutional capacity and enforcement mechanisms have strengthened.

The following recommendations are derived from the evidence synthesised in the Discussion and reflect feasibility considerations specific to fragile-state contexts such as Somalia. These recommendations do not propose a uniform or simultaneous expansion of all health taxes, but instead adopt a pragmatic sequencing strategy informed by the political economy constraints and implementation risks outlined in the preceding Discussion section.

Prioritize tobacco taxation

Prioritizing tobacco taxation as an initial entry point is supported by stronger evidence on price responsiveness, clearer alignment with international guidance, and lower sociocultural resistance compared with alcohol, sugary drinks, or khat taxation in Somalia.

Build political consensus on taxation

Building a broad political consensus on sin taxes is crucial for their success. Leaders in Somalia should engage in dialogue with key stakeholders, including political elites, local authorities, and business leaders, to create a unified vision for taxation reform that prioritizes public health.

Strengthening coordination with regional and local governments

Coordination between Somalia’s federal government and local authorities is essential for the smooth implementation of sin taxes. Local governments should be empowered to enforce these taxes at the grassroots level, ensuring that the taxes reach all areas of the country.

Strengthening tax administration and enforcement

To ensure effective collection and reduce evasion, Somalia should invest in strengthening its tax administration. This includes enhancing the capacity of the Somali Revenue Authority (SRA) to monitor and enforce sin tax compliance, especially in the informal economy. Robust enforcement mechanisms will ensure higher compliance and tax revenue generation, which can be allocated to public health initiatives.

Implement public awareness campaigns

Public education campaigns are critical to the success of sin taxes. The Somali government should invest in comprehensive public health campaigns that explain the benefits of sin taxes in reducing consumption and promoting health. This will help reduce resistance and foster greater public support.

Integrate sin taxes with broader health policy

Sin taxes should be part of a wider, holistic health policy that includes tobacco control, alcohol regulation, and nutritional education. A cohesive strategy will increase the likelihood of long-term health improvements and prevent any unintended consequences of isolated tax measures.

Foster international cooperation and support

Given Somalia’s fragility, international partners such as the World Health Organization (WHO) and the World Bank can provide technical support and funding to help design and implement sin taxes effectively. International cooperation can also facilitate the sharing of best practices from other fragile states.

Encourage private sector collaboration

Collaborating with the private sector, especially local producers, can help ensure that tax policies do not hurt local businesses unduly. Private sector involvement can also encourage the production of healthier goods, providing alternatives to sin products while supporting economic development.

Discussions

The findings of this study underscore the potential of leveraging sin tax revenues as a sustainable financial mechanism to enhance health financing in Somalia, particularly in the pursuit of Universal Health Coverage (UHC). The key insights highlight both the opportunities and challenges associated with sin taxes, focusing on their dual role in public health promotion and resource mobilization.

Somalia’s health financing landscape, as described, is characterized by a heavy reliance on external aid, out-of-pocket expenditures, and remittances. The country’s health sector is underfunded, with government health spending remaining below international standards. Despite recent progress, such as the introduction of a 5% Value-Added Tax (VAT), Somalia’s tax-to-GDP ratio remains low, indicating limited capacity for domestic resource mobilization [49, 61]. This leaves the country vulnerable to fluctuations in external aid, which often fails to meet the growing demands of the health system. Referring to a 12% increase from the previous year’s revenue, this positive trend indicates effective revenue collection strategies and suggests potential for sustained fiscal growth. However, maintaining this momentum will require continued reforms and efficient allocation of resources to support development and public services [45]. In the Somali context, where out-of-pocket spending is already high and catastrophic expenditure risk is significant, the potential long-term health and financial protection benefit for poorer households strengthen the equity case for well-designed health taxes, especially when revenues are transparently allocated to essential services [49, 103].

Although health taxes may appear regressive in the short term, international evidence suggests that poorer populations often experience greater long-term gains through reductions in harmful consumption and avoidance of catastrophic health expenditure. Equity safeguards such as earmarking part of revenue toward primary care and social protection are therefore particularly important in fragile settings such as Somalia [104].

The implementation of sin taxes, particularly on tobacco, alcohol, and sugary beverages, could serve as a vital tool for reducing Somalia’s reliance on external funding, by providing a stable and predictable revenue stream. This aligns with the global trend where sin taxes have been instrumental in addressing similar health financing challenges in low- and middle-income countries (LMICs). For instance, South Africa's Health Promotion Levy on sugary drinks not only reduced consumption but also generated substantial revenues, which were directed toward health programs targeting non-communicable diseases (NCDs) [77, 78]. Similarly, the Philippines saw remarkable growth in tobacco and alcohol tax revenues, which significantly bolstered its national health insurance program, PhilHealth [89]. Implementation feasibility in Somalia is shaped by political-economy factors including federal–state fiscal fragmentation, variable enforcement capacity, informal import networks and stakeholder resistance. These dynamics highlight the need for gradual sequencing of health-tax reforms and institutional strengthening prior to large-scale expansion [46].

The primary rationale behind sin taxes is twofold: public health improvement and fiscal sustainability. By discouraging the consumption of harmful products, sin taxes help mitigate the burden of preventable diseases, such as respiratory illnesses from tobacco and obesity-related conditions from sugary drinks. This prevention-based approach is particularly critical for Somalia, where NCDs are rising due to the growing consumption of processed foods, tobacco, and sugary beverages, compounded by limited access to quality healthcare services [35, 37].

From a financial perspective, sin taxes can serve as a crucial mechanism for financing essential health services, including primary care, maternal and child health, and essential medicines [105, 106]. However, for sin taxes to be effective in Somalia, several conditions must be met. First, tax rates must be high enough to deter consumption, while being carefully designed to minimize evasion and ensure equitable enforcement. Second, it is essential that the revenue generated from sin taxes be earmarked explicitly for health-related initiatives, which would bolster public trust and acceptance of the taxes. This strategy has been successfully employed in countries like Ghana, where increased tobacco taxes have been used to fund NCD prevention and treatment programs [85].

The international experience with sin taxes offers valuable lessons for Somalia. South Africa’s success with the Health Promotion Levy illustrates how targeted taxes on unhealthy products can change consumer behavior while generating significant revenue. Similarly, Oman’s excise taxes on tobacco and sugary drinks have not only reduced consumption but also funded public health initiatives focused on NCD prevention [81, 82]. These examples suggest that Somalia can draw on similar strategies, tailoring them to its unique socio-political and economic context.

However, the application of these global best practices in Somalia must consider the country’s fragile political and institutional environment. The challenges in Somalia are multifaceted, with political instability, weak governance structures, and a fragmented health system [107]. These factors complicate the implementation of sin taxes and could potentially hinder their effectiveness. For example, in fragile states like Somalia, resistance from stakeholders—especially from powerful industries such as tobacco and alcohol—could undermine tax policy initiatives. Furthermore, the regressive nature of sin taxes, which disproportionately affect low-income populations, could heighten inequality and social unrest if not mitigated by complementary policies, such as targeted health subsidies or public health campaigns [75, 95].

The political economy of sin tax implementation in fragile states, including Somalia, is fraught with challenges. As highlighted, the resistance from local elites, multinational corporations, and informal sector actors poses significant barriers to tax enforcement. These actors often have vested interests in maintaining the status quo, as higher taxes could erode profit margins and disrupt established markets. Moreover, Somalia’s weak institutional framework and lack of tax enforcement capacity could limit the ability of the government to collect taxes effectively, as seen in other fragile states [75, 96].

Despite these obstacles, the implementation of sin taxes offers an opportunity to shift the focus from dependency on foreign aid to a more self-sustaining model of health financing. As evidenced in countries like the Philippines, a carefully managed sin tax policy can generate substantial resources for UHC, provided that the political will and institutional capacity are aligned. For Somalia, this means that the government must build broad political consensus, strengthen tax administration, and ensure transparency in the allocation of tax revenues to health programs.

To optimize the potential of sin taxes in Somalia, several policy recommendations emerge from this discussion. First, there is a need for comprehensive public health campaigns to educate citizens on the benefits of sin taxes and the importance of reducing consumption of harmful products. Second, Somalia should enhance coordination between federal and state authorities to ensure that sin taxes are effectively implemented and enforced at the local level. Third, strengthening the capacity of the Somali Revenue Authority (SRA) to monitor and enforce compliance is crucial for maximizing the revenue potential of sin taxes [70]. Lastly, international support, particularly from organizations like the WHO and the World Bank, is essential to provide technical expertise and funding to implement these taxes successfully. This review has several limitations. As a scoping review, it does not assess causal impact and draws on heterogeneous evidence, including grey-literature sources. Empirical data specific to Somalia remain limited, meaning some inferences are informed by findings from comparable fragile contexts. These evidence gaps highlight the need for country-specific fiscal-impact modelling and implementation research.

Conclusion

Somalia’s path to Universal Health Coverage (UHC) will remain constrained as long as its health sector is financed chiefly by external aid, out-of-pocket spending and a still-narrow domestic tax base. Sin-tax instruments, especially on tobacco, alcohol, sugary drinks and khat—offer a rare, dual opportunity: they curb risk-laden consumption while creating a predictable revenue stream that can be earmarked for essential services such as primary care, maternal and child health and NCD prevention. Evidence from peer countries shows that well-designed health taxes can both shrink disease burdens and generate sizeable fiscal space, suggesting that Somalia could replicate similar gains if rates are set high enough, adjusted automatically for inflation and paired with robust enforcement.

Realizing this potential will hinge on strong governance. Building a broad political consensus, empowering federal-state coordination, modernizing the Somali Revenue Authority’s enforcement toolkit and running sustained public-awareness campaigns will be indispensable to minimize evasion, blunt regressive effects and maintain public trust. Crucially, every shilling raised must be hypothecated (earmarked) for clearly identifiable health priorities and reported transparently, acknowledging ongoing debates about hypothecated taxes but arguing that, in Somalia’s fragile, aid-dependent setting, soft earmarking for UHC and EPHS priorities could strengthen both accountability and public support.

If these safeguards are met, sin-tax revenues could become a cornerstone of Somalia’s National Transformation Plan (2025–2029) and the Essential Package of Health Services, accelerating progress toward UHC while lowering catastrophic health expenditures that currently lock households in poverty. Future work should quantify expected revenue under alternative tax scenarios; track equity impacts by income quintile and establish a monitoring framework to ensure funds translate into measurable health gains. In short, sin taxes are not a silver bullet, but—embedded within broader financing and service-delivery reforms—they represent one of the most pragmatic levers Somalia can pull to secure healthier, financially protected lives for its people.

Authors’ contributions

Saadaq Adan Hussein conceptualized the study, led the manuscript development, and coordinated the overall research process, including writing the original draft. Marian Muse Osman contributed to the conceptualization and design of the work. Yakub Burhan Abdullahi participated in writing – review & editing of the manuscript. Mohamed Mohamoud Hassan was involved in the conceptualization of the study. Abdihakim Ibrahim Ahmed contributed to reviewing and editing the manuscript. Naima Ibrahim Ahmed assisted with writing – review & editing. Yahye Sheikh Abdulle Hassan contributed to reviewing and editing the manuscript. Abdirahman Aden Hussein supported writing – review & editing of the manuscript. Rage Adem participated in writing – review & editing. Abdirahman Moallim Ibrahim contributed to writing – review & editing of the manuscript. Yusuf Hared Abdi assisted in writing – review & editing. Ayan Nur Ali contributed to methodology and design of the work. Abdinur Hussein Mohamed contributed to the methodology and manuscript editing. Abdullahi Ahmed Tahlil assisted with the review of the manuscript. Sharmake Gaiye Bashir contributed to writing – review & editing. Mohamed Sharif Abdi participated in writing – review & editing of the manuscript. Khadar Hussein Mohamud contributed to methodology and design of the work. Abdihakim Mohamed Hassan assisted in reviewing and editing the manuscript. Mohamed Ahmed Ali contributed to writing – review & editing. Mohamed Farah Yusuf participated in writing – review & editing of the manuscript. Abdinur Adan Hussein contributed to writing – review & editing of the manuscript. Mohamed Sheikh Hassan participated in writing – review & editing. Walid Abdulkadir Osman assisted with the review and refinement of the manuscript.

Funding

This research received no specific grant from funding agencies in the public, commercial or non-profit sectors.

Data availability

No primary datasets; supporting materials available on request.

Declarations

Ethics approval and consent to participate

N/A.

Consent for publication

N/A.

Competing interests

The authors declare no competing interests.