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Reduce consumption of health-harming products to reduce the burden of noncommunicable diseases:
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Reduce negative externalities and internalities through corrective taxes:
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| Health taxes should deter consumers from using products harmful to their health and encourage people towards healthier alternatives |
Health taxes should cover the social and personal costs of products harmful to health, without resulting in substitution with other harmful products |
Reduce costs to individuals and the health system |
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Raise revenue
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| Revenue generated can be used towards subsidizing healthy products or allocated to public health initiatives |
Health taxes should generate predictable revenue streams to meet overall government revenue targets |
Raise revenue |
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Equity impacts
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| Consumers of low socioeconomic status are disproportionately affected by noncommunicable diseases and will experience greater health gains through health taxes |
Health taxes should not increase the regressivity of the tax system by creating an unfair burden on lower-income households |
Promote equity |
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Economic impacts
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| Consumption of harmful products contributes to noncommunicable diseases and decreased individual productivity and participation in the labour force |
Health taxes should promote sustainable economic growth and not reduce a country’s overall employment or economic growth |
Ensure a healthy workforce and sustainable development that benefits society, economies and the environment |
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Tax administration
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| Health taxes should be supported by effective tax administration and not be undermined by illicit trade in harmful products |
Health taxes should be transparent and easy to pay and enforce |
Prevent illicit trade |
