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The Task Force on Fiscal Policy for Health Calls for Increase in Excise Taxes on Tobacco, Alcohol and Sugary Beverages

Task Force seeks to stop the rise of deadly noncommunicable diseases, particularly in low- and middle-income countries

NEW YORK – The Task Force on Fiscal Policy for Health, created to address the growing global burden of noncommunicable diseases, including heart disease, cancer and diabetes, today released new findings showing that over 50 million premature deaths could be prevented if countries implemented tax increases large enough to raise product prices of tobacco, alcohol and sugary beverages by 50 percent over the next 50 years. The Task Force-commissioned analysis, published in the report “Health Taxes to Save Lives,” found that the impact of these taxes, projected to yield over US$20 trillion in revenue, would be highest in low- and middle-income countries, where consumption and associated healthcare costs and productivity losses are growing.

The analysis shows that a steep rise in tobacco taxes alone could do more to reduce deaths from NCDs worldwide than any other single health policy, averting more than 27 million deaths tied to tobacco use over the next 50 years. The analysis also showed that a 50 percent price increase on alcohol and on sugary beverages induced by taxes could avert almost 22 million premature deaths and 2.2 million premature deaths, respectively, over 50 years.

“If we want to improve global health, we need to tax the things that are killing us,” said Lawrence H. Summers, Task Force co-chair and former Secretary of the U.S. Treasury and former Director of the National Economic Council. “Taxing things that are bad for your health, like tobacco, over things like savings and income is as close to a free lunch as you can get in economics. The economic rationale for taxing these products is strong if we want to save lives and make a better, healthier world.”

“Countries can save millions of lives if they take action,” said Task Force co-chair Michael R. Bloomberg, World Health Organization Global Ambassador for Noncommunicable Diseases and Injuries and the founder of Bloomberg Philanthropies. “Despite the clear and growing body of evidence, industry opposition to smart health policies will continue to mislead the public about the harmful effects of their products. That makes it all the more important for the international community to support countries in adopting effective, evidence-based health policies that will save lives.”

Noncommunicable diseases are now the leading cause of death in the world, killing more than 41 million people each year and accounting for 70 percent of all deaths globally. Cardiovascular disease, respiratory diseases, and diabetes account for three quarters of these deaths, and the burden of these diseases is growing rapidly. Half of all the deaths from NCDs in low- and middle-income countries occur before age 70, shortening the productive lives of working age adults, increasing health costs unnecessarily, and sinking people deeper into poverty.

The Task Force on Fiscal Policy for Health, comprised of finance, development, and health leaders from around the world, convened in 2018 to address the enormous and growing health and economic burden of noncommunicable diseases, and to review the evidence on fiscal policies for health.

The group has two main recommendations for countries:

  • Rapidly and significantly raise tobacco and alcohol taxes, and continue to raise taxes over time, to make tobacco and alcohol products less affordable, to reduce use, and to prevent unnecessary death and disease.
  • Actively implement policies directed at reducing consumption of sugar as it is a significant contributor to the rise in obesity, diabetes, and other associated noncommunicable diseases. Taxes on sugary beverages in particular are a promising policy tool.

They also recommend that countries:

  • Design their health taxes to be easy to administer and hard to manipulate.
  • In addition to significantly raising health taxes in the short term, improve excise tax administration and enforcement to reap the full benefits for health and revenues.

“Implementing excise taxes on products that harm health is a test of government effort and resolve,” concludes the Task Force report. Noting that affected industries fight back by using false or misleading statements related to revenues, employment, illicit trade and impacts on the poor, the group says their research shows that most of this criticism “fails to stand up to analysis; none of it justifies inaction.”

The “Health Taxes to Save Lives” report can be viewed and downloaded here: https://www.bloomberg.org/program/public-health/task-force-fiscal-policy-health/

 

The Task Force on Fiscal Policy for Health includes the following members:

Michael R. Bloomberg, co-chair
Lawrence H. Summers, co-chair
Masood Ahmed, President, Center for Global Development, United States
Zeti Aziz, Former Central Bank Governor, Malaysia
Kaushik Basu, Professor of Economics, Cornell University, United States
Mauricio Cárdenas, Former Minister of Finance, Colombia
Margaret Chan, Former World Health Organization Director General, Hong Kong
Helen Clark, Former UNDP Administrator; Former Prime Minister, New Zealand
Bent Høie, Minister of Health and Care Services, Norway
Sri Mulyani Indrawati, Minister of Finance, Indonesia
Ngozi Okonjo-Iweala, Former Minister of Finance, Nigeria
Zhu Min, Director, National Institute of Financial Research, Tsinghua University, China
Minouche Shafik, Director, London School of Economics, England
Nicola Sturgeon, First Minister, Scotland
Tabaré Vázquez, President, Uruguay

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