Can a Global Initiative on Health Taxes Finance Development?

Low- and middle-income countries (LMICs) are struggling from the aftereffects of a global pandemic, rising debt, and stagnating growth—and are now facing a further financing crisis as major donors slash their aid budgets. Against this backdrop, domestic resource mobilisation is crucial if governments are to deliver on their priorities. Health taxes are an ideal policy option to raise revenue and improve public health: if all low- and middle-income countries increased taxes enough to raise prices of tobacco, alcohol, and sugar-sweetened beverages by 50 percent, they could raise $2.1 trillion over the next five years—equivalent to 180 percent of total Official Development Assistance. However, despite this potential, health taxes remain underutilised.