New Report: Increasing Health Taxes Could Raise US$3.7 Trillion Over The Next Five Years

Raising taxes on tobacco, alcohol, and sugary beverages is a simple, yet neglected policy that will prevent millions of premature deaths globally and generate additional government revenue

NEW YORK – The Task Force on Fiscal Policy for Health today released a new report, “Health Taxes: A Compelling Policy for the Crises of Today,” showing that 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.

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. The Task Force is co-chaired by Mike Bloomberg, economist Larry Summers, and Prime Minister of Barbados Mia Amor Mottley and is comprised of finance, development, and health leaders from around the world.

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 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. “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.”

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.”

According to the Task Force, progress toward raising tobacco taxes has languished and should be a priority focus moving forward. Tobacco is responsible for eight million deaths worldwide every year. Yet taxes on tobacco have lapsed over the last five years: 87% of the world’s one billion smokers now live in countries where cigarettes are equally or more affordable than they were in 2019. Raising tobacco taxes would induce more than 100 million smokers to quit – nearly 10% of the world’s smokers.

“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.”

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.

The new report, “Health Taxes: A Compelling Policy for the Crises of Today” can be viewed and downloaded here.

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

• Michael R. Bloomberg, Co-chair; Founder, Bloomberg L.P. & Bloomberg Philanthropies; Former Mayor of New York City; WHO Global Ambassador for Noncommunicable Diseases and Injuries
• Mia Amor Mottley, Co-chair; Prime Minister of Barbados
• Lawrence H. Summers, Co-chair; Former Secretary of the Treasury, United States; Charles W. Eliot University Professor and President Emeritus, Harvard University
• Masood Ahmed, President Emeritus, Center for Global Development
• Zeti Akhtar Aziz, Former Central Bank Governor, Malaysia; Board of Governors of Asia School of Business
• Kaushik Basu, Professor of Economics and Carl Marks Professor of International Studies, Cornell University
• Gordon Brown, Former Prime Minister of UK; WHO Ambassador for Global Health Financing
• Mauricio Cárdenas Santamaria, Former Minister of Finance, Colombia; Professor of Professional Practice, Global Leadership, Columbia University
• Helen Clark, Former UNDP Administrator; Former Prime Minister, New Zealand
• Jason Furman, Former Chair of US Council of Economic Advisors; Professor of Practice, Harvard University
• Amadou Hott, Former Minister of Economy, Planning and Cooperation, Senegal
• Cathrine M. Lofthus, Secretary General, Ministry of Health and Care Services, Norway
• Zhu Min, Chair, National Institute of Financial Research, Tsinghua University, China; Former Deputy Managing Director, IMF
• Sania Nishtar, Chief Executive Officer, Gavi, the Vaccine Alliance
• Muhammad Pate, Minister of Health and Social Welfare, Nigeria
• Cesar Purisima, Former Secretary of Finance, Philippines
• Minouche Shafik, Former President, Columbia University; Former Deputy Governor, Bank of England
• K. Singh, Former Chairman of Fifteenth Finance Commission, India
• Nisia Trindade Lima, Minister of Health, Brazil
• Andres Velasco, Former Minister of Finance, Chile; Dean School of Public Policy, London School of Economics

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Bloomberg Philanthropies invests in 700 cities and 150 countries around the world to ensure better, longer lives for the greatest number of people. The organization focuses on creating lasting change in five key areas: the Arts, Education, Environment, Government Innovation, and Public Health. Bloomberg Philanthropies encompasses all of Michael R. Bloomberg’s giving, including his foundation, corporate, and personal philanthropy as well as Bloomberg Associates, a philanthropic consultancy that advises cities around the world. In 2023, Bloomberg Philanthropies distributed $3 billion. For more information, please visit bloomberg.org, sign up for our newsletter, or follow us on Instagram, LinkedIn, YouTube, Threads, Facebook, and X.

About the Center for Global Development
The Center for Global Development (CGD) is an independent, nonpartisan think tank, based out of Washington D.C. and London. It works to reduce global poverty and improve lives through innovative economic research that drives better policy and practice by the world’s top decision makers.

CGD is the secretariat of the Task Force on Fiscal Policy for Health.