Health taxes: Levies on products with negative public health impact worldwide
Health taxes: Making harmful products costly saves lives and raises revenue
Finance Minister Abebe Desta (Ethiopia) remembers the fierce debate. His government proposed increasing taxes on cigarettes, alcohol, and sugary drinks. Tobacco companies warned of job losses. Beverage manufacturers threatened to move factories. Opposition politicians predicted public anger.
“I was terrified,” Minister Desta admitted. “What if they were right? What if higher taxes destroyed our economy?”
Three years later, the results speak for themselves. Cigarette consumption dropped 25%. Diabetes rates among youth stabilized for the first time in decades. Government revenue increased by $200 million annually—enough to build 50 new health clinics. Poor communities benefited most because they reduced spending on harmful products and avoided catastrophic medical expenses.
“The tobacco companies were wrong. The beverage industry was wrong. Health taxes didn’t destroy our economy—they strengthened it while saving thousands of lives,” Minister Desta said proudly. July 2025 WHO highlighted Ethiopia’s bold strides on health taxes to drive Universal Health Coverage as a model for other countries.
This is the power of health taxes. According to WHO, health taxes are levied on products that have a negative public health impact, for example tobacco, alcohol and sugar-sweetened beverages (SSBs). These taxes are considered win-win-win policies because they save lives and prevent disease while advancing health equity and mobilising revenue for the general budget.
For more on related public health interventions, see our articles on tobacco control and healthy diet at ObserverVoice.com. WHO provides comprehensive fact sheets on tobacco, healthy diet, obesity and overweight, sugars and dental caries, and alcohol.
How Health Tax Policy Works
The aim of health tax policy is to reduce the consumption of products deemed risk factors for noncommunicable diseases by making them less affordable through higher prices. This is achieved with regular tax increases large enough to result in real price increases greater than economic growth.
Excise taxes are the most effective tax measure for promoting health because they change the price a harmful product relative to other goods and can be easily increased over time. Consumption is reduced best with taxes based on the quantity (known as specific taxes) of an unhealthy product (such as packs of cigarettes) or its unhealthy ingredient (such as pure alcohol or sugar) rather than taxes based on the product’s value.
WHO provides Health taxes database tracking global implementation, Global Health Observatory data on excise tax on alcoholic beverages, and Global Health Observatory data on raise taxes on tobacco.
Health taxes can be used for specific priorities such as financing universal health coverage (UHC) or highly cost-effective yet underutilised population health measures. Related topics include health financing and health systems governance. For more on healthcare funding, see our article on health financing at ObserverVoice.com.
SMART Policy Framework
Raising health taxes is a SMART policy because it Saves lives, Mobilises revenue, Addresses health inequities, Reduces burdens on health systems, and Targets noncommunicable disease risk factors for the achievement of Sustainable Development Goals.
Saves lives: Tobacco, alcohol and sugar-sweetened beverages taxes are all effective and cost-effective ways of reducing consumption, preventing diseases and injuries and saving lives.
Mobilises revenue: Health taxes can be a revenue booster over the short and medium term. Importantly, health taxation is also more inclusive and pro-growth than alternative sources of revenue.
Addresses health inequities: In lower- and middle-income countries, lower socioeconomic status is associated with higher risk of noncommunicable diseases and higher rates of tobacco use and alcohol consumption. Accordingly, the net impact of health taxes is progressive once one fully accounts for the distribution of health benefits, income losses averted and reductions in catastrophic healthcare costs.
Reduces burdens on health systems: An ounce of prevention is worth a pound of cure—health taxes are also a high-return investment in averted healthcare expenditure and increased workforce participation.
Targets noncommunicable disease risk factors: By targeting noncommunicable disease risk factors with health taxes, countries can progress their achievement of Sustainable Development Goal 3.4, which calls for a one-third reduction of premature mortality from noncommunicable diseases by 2030.
WHO’s Three-Area Response
Countries are increasingly interested in using health taxes to achieve their health, revenue and equity objectives but require assistance with framing, designing, implementing and administering these measures. WHO’s response leverages its unique methodological expertise, technical capacity and country-level relationships established over more than a decade of work on tobacco taxation.
WHO divides its response into three interconnected areas of work:
Technical assistance to help governments seeking to adopt, reform or evaluate health tax measures. This tailored assistance helps Member States address challenges raised by providing, for example, tax system diagnostics, country-specific modelling for the impact of health tax reforms and independent evaluations of industry arguments. WHO’s activity on addressing the political economy of health financing reform supports this work.
Capacity building engages regulators and policymakers on an ongoing basis in their framing and prioritisation of health taxes including the development of plans for progressing, implementing and evaluating health tax policies. WHO’s activities include controlling the global obesity epidemic and raising taxes on tobacco.
Global goods build on the latest evidence base to support country level work by defining best practices, guiding policy development, detailing technical requirements and providing data to support and benchmark policy progress.
Recent Publications and Global Action
January 2026 WHO published groundbreaking Global report on the use of sugar-sweetened beverage taxes, 2025 providing global assessment of taxes applied to SSBs, describing and qualitatively comparing their design. WHO simultaneously published Global report on the use of alcohol taxes, 2025 providing assessment of taxes applied to alcoholic beverages at global level.
January 2026 WHO launched reports warning cheaper drinks will see a rise in noncommunicable diseases and injuries. January 2026 WHO hosted event Cheaper Drinks, Costly Consequences: Launch of WHO global reports.
December 2025 WHO published WHO technical manual on tobacco tax policy and administration building upon 2010 manual by further detailing implementation strategies. July 2025 WHO launched bold push to raise health taxes and save millions of lives.
December 2023 WHO called on countries to increase taxes on alcohol and sugary sweetened beverages. WHO featured Kyrgyzstan controls prices of essential medicines in pursuit of health for all. WHO produced video Tobacco Taxes: Averting death and promoting inclusive growth post-COVID-19.
WHO supports The 3 by 35 Initiative targeting health tax implementation. WHO’s technical work is coordinated through Health promotion, Fiscal policies for health, Health systems governance and financing, Mental health and substance abuse, Nutrition and food safety, and Noncommunicable diseases, rehabilitation and disability teams.
Strong International Support
World Health Assembly passed multiple resolutions supporting health taxes including WHA 72/58 on Outcome of Second International Conference on Nutrition, EB150/7 Add.1 on action plan to effectively implement global strategy to reduce harmful use of alcohol, WHA70.19 on Report of Commission on Ending Childhood Obesity implementation plan, WHA70.11 on Preparation for third High-level Meeting on Prevention and Control of Non-communicable Diseases, WHA63.13 on Global strategy to reduce harmful use of alcohol, WHA61.14 on Prevention and control of noncommunicable diseases, and WHA56.1 on WHO Framework convention on tobacco control.
Minister Desta now advises other African finance ministers considering health taxes. “Don’t let industry scare tactics stop you. The evidence is overwhelming. Health taxes save lives, reduce inequality, generate revenue, and strengthen economies. It’s not just good health policy—it’s good economic policy. Countries that delay implementing health taxes are leaving money on the table while their citizens suffer preventable diseases.”
For more information, visit WHO’s health taxes topic page or explore related content at ObserverVoice.com.
Frequently Asked Questions (FAQs)
Health taxes are levied on products that have negative public health impact, for example tobacco, alcohol and sugar-sweetened beverages (SSBs). These taxes are considered win-win-win policies because they save lives and prevent disease while advancing health equity and mobilising revenue for general budget. They can be used for specific priorities such as financing universal health coverage (UHC) or highly cost-effective yet underutilised population health measures. Excise taxes are most effective tax measure for promoting health because they change price of harmful product relative to other goods and can be easily increased over time. WHO provides fact sheets on tobacco, alcohol, healthy diet, obesity and overweight.
Raising health taxes is SMART policy because it: Saves lives through effective and cost-effective ways of reducing consumption, preventing diseases and injuries; Mobilises revenue as health taxes can be revenue booster over short and medium term, more inclusive and pro-growth than alternative sources; Addresses health inequities with progressive net impact accounting for distribution of health benefits, income losses averted and reductions in catastrophic healthcare costs; Reduces burdens on health systems as high-return investment in averted healthcare expenditure and increased workforce participation; Targets noncommunicable disease risk factors for achievement of Sustainable Development Goal 3.4 calling for one-third reduction of premature mortality from NCDs by 2030. Related: universal health coverage, health financing.
WHO’s response leverages unique methodological expertise, technical capacity and country-level relationships established over more than decade of work on tobacco taxation. WHO divides response into three interconnected areas: (1) Technical assistance helping governments adopt, reform or evaluate health tax measures through tax system diagnostics, country-specific modelling for impact of reforms and independent evaluations of industry arguments; (2) Capacity building engaging regulators and policymakers in framing and prioritisation of health taxes including development of plans for progressing, implementing and evaluating policies; (3) Global goods building on latest evidence base to support country level work by defining best practices, guiding policy development, detailing technical requirements. WHO provides Health taxes database, Global Health Observatory data. WHO coordinates raising taxes on tobacco, controlling global obesity epidemic.
January 2026 WHO published Global report on use of sugar-sweetened beverage taxes, 2025 providing global assessment of taxes applied to SSBs, describing and qualitatively comparing their design. WHO simultaneously published Global report on use of alcohol taxes, 2025 providing assessment of taxes applied to alcoholic beverages at global level. December 2025 WHO published WHO technical manual on tobacco tax policy and administration. July 2025 WHO launched bold push to raise health taxes and save millions of lives. July 2025 WHO highlighted Ethiopia’s bold strides on health taxes to drive UHC. January 2026 WHO warned cheaper drinks will see rise in NCDs and injuries.
World Health Assembly passed multiple resolutions supporting health taxes: WHA 72/58 on Outcome of Second International Conference on Nutrition; EB150/7 Add.1 on action plan (2022–2030) to effectively implement global strategy to reduce harmful use of alcohol; WHA70.19 on Report of Commission on Ending Childhood Obesity implementation plan; WHA70.11 on Preparation for third High-level Meeting on Prevention and Control of Non-communicable Diseases; WHA63.13 on Global strategy to reduce harmful use of alcohol; WHA61.14 on Prevention and control of noncommunicable diseases; WHA56.1 on WHO Framework convention on tobacco control. WHO supports The 3 by 35 Initiative. Related: health systems governance.
- WHO Health Taxes Topic Page
- Health Taxes Database
- Global Report on Sugar-Sweetened Beverage Taxes 2025
- Global Report on Alcohol Taxes 2025
- WHO Technical Manual on Tobacco Tax Policy and Administration
Disclaimer: This article is an adaptation of publicly available information from WHO’s Health taxes
health topic page (WHO, Geneva. Licence: CC BYNC-SA 3.0 IGO). WHO is not responsible for the
content or accuracy of this adaptation. This content is for informational and educational purposes
only and does not constitute medical advice. ObserverVoice.com is a news and information platform
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