Opinion: Excise taxes on tobacco, alcohol, and sugary beverages benefit health and public budgets
The Covid-19 pandemic blew up budget deficits in low- and middle-income countries, pushing many toward or into precarious financial straits. There is also growing pressure on policymakers to soften the impact of food and energy inflation with temporary tax and tariff cuts and consumption subsidies, measures that will need to be offset by other fiscal responses to fill budget holes. One way to do that while simultaneously improving the health of individuals and populations is by raising excise taxes on tobacco, alcohol, and sugary beverages.
With public fiscal space constrained more than ever, few policy levers remain as potent for raising revenue — and as narrowly targeted and socially beneficial — as excise taxes. The Center for Global Development estimates that health taxes could help countries close at least half of their revenue shortfalls in the near term.
