Publication: Health Earmarks and Health Taxes: What Do We Know?
Loading...
Other Files
327 downloads
Published
2020-12
ISSN
Date
2020-12-17
Editor(s)
Abstract
Earmarking means taking all or a portion of total revenue from a tax or group of taxes and setting it aside or ‘protecting’ it for a designated expenditure purpose. Earmarking practices vary from ‘hard’ to ‘soft,’ and are associated with different levels of fiscal risk. At least 80, and likely more, countries earmark for health. However, earmarking is unlikely to bring a sustained net increase in revenue due to offsetting and can create rigidities and inefficiencies. If allocations fail to match priorities or if a tax can make the priority more politically acceptable, soft earmarks that are closer to standard budget processes may be useful in the short term. The primary intent of “health taxes” is to curb unhealthy behaviors that affect population health and can strain health systems. Health taxes can generate revenue without compromising equity, and their revenues can be earmarked, but they do not by design net more money for health. In the context of fiscal constraints (e.g., with COVID-19), heath taxes may provide an overall source of revenue for governments and help manage disease burden and fiscal pressure on the health system by reducing risk factors for COVID-19. Soft earmarks on health taxes may also help inject short-term funding into the health sector, if the appropriate public financial management safeguards are in place.
Link to Data Set
Citation
“Ozer, Ceren; Bloom, Danielle; Martinez Valle, Adolfo; Banzon, Eduardo; Mandeville, Kate; Paul, Jeremias; Blecher, Evan; Sparkes, Susan; Chhabra, Sheena. 2020. Health Earmarks and Health Taxes: What Do We Know?. Health, Nutrition and Population Knowledge Brief;. © World Bank. http://hdl.handle.net/10986/34947 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Investing in People: Revisiting Fiscal Options to Finance Human Development in the MENA Region(Washington, DC: World Bank, 2025-09-11)This report’s focus on fiscal matters complements ongoing work on megatrends involving labor markets, skills, demographics and climate (KP-1) and institutional matters (KP-2). The present KP-3 is not meant to be exhaustive in discussing the full range of financing and spending details in the region; instead, it provides an overview of key issues complemented by select deep dives – that is, the emphasis is not on being academically comprehensive, but on generating a policy-relevant, pragmatic and evolving conversation. Segments of the report may be updated in future editions as new statistics become available. A data annex complements the main body text and references are directly footnoted as hyperlinks.Publication Tobacco and Alcohol Excise Taxes for Improving Public Health and Revenue Outcomes(World Bank, Washington, DC, 2015-11)Excise taxes on alcohol and tobacco have long been a dependable and significant revenue source in many countries. More recently, considerable attention has been paid to the way in which such taxes may also be used to attain public health objectives by reducing the consumption of products with adverse health and social impacts. Some have gone further and argued that explicitly earmarking excise taxes on alcohol and tobacco to finance public health expenditures—marrying sin and virtue as it were—will make increasing such taxes more politically acceptable and provide the funding needed to increase such expenditures, especially for the poor. The basic idea—tax “bads” and do “good” with the proceeds—is simple and appealing. But designing and implementing good “sin” taxes is a surprisingly complex task. Earmarking revenues from such taxes for health expenditures may also sound good and be a useful selling point for new taxes. However, such earmarking raises difficult issues with respect to budgetary rigidity and political accountability. This note explores these and other issues that lurk beneath the surface of the attractive concept of using increased sin excises on alcohol and tobacco to finance “virtuous” social spending on public health.Publication Working in Health : Financing and Managing the Public Sector Health Workforce(World Bank, 2009)The health workforce plays a key role in increasing access to health services for the poor in developing countries. Recent evidence has demonstrated an important link between staffing levels and both service delivery and health outcomes. Various global and country-level estimates have also shown that current staffing levels in developing countries, particularly in Sub-Saharan Africa, are often well below those required to deliver essential health services. This study focuses on two main aspects of health workforce policy. First, it examines how overall government wage bill policies affect the size of the health wage bill, the hiring of health workers in the public sector, and the related policy options. This focus is important because despite the importance of fiscal constraints on the wage bill, and the persistent debate at the global level, very little documented evidence describes how health wage bill budgets in the public sector are determined, how this action is linked to overall wage bill policies, and how it affects the ability of governments to increase staffing levels in the health sector. Second, this report looks at how well health wage bill resources are used in the public sector.Publication Assessing Fiscal Space for Health in the SDG Era(Taylor and Francis, 2018-01)Initially defined for overall public purposes, the concept of fiscal space was subsequently developed and adapted for the health sector. In this context, it has been applied in research and policy in over 50 low- and middle-income countries over the past ten years. Building on this vast experience and against the backdrop of shifts in the global health financing landscape in the Sustainable Development Goals (SDG) era, the commentary highlights key lessons and challenges in the approach to assessing potential fiscal space for health. In looking forward, the authors recommend that future fiscal space for health analyses primarily focus on domestic sources, with specific attention to potential expansion from the improved use and performance of public resources. Embedding assessments in national health planning and budgeting processes, with due consideration of the political economy dynamics, will provide a way to inform and impact allocative decisions more effectively.Publication Reforming Health Taxes to Improve Mexico’s Health(Washington, DC: World Bank, 2025-08-27)Improvements on excise taxes on tobacco, alcoholic beverages, and Sugar-Sweetened Beverages (SSBs) are urgently needed in Mexico to reduce preventable premature deaths. In Mexico, 125,350 people lose their lives annually due to the use of these products. Beyond the health toll, consumption of these products also carries significant fiscal implications. In the case of tobacco products, the fiscal cost amounts to 0.8 percent of GDP each year (Saenz-de-Miera, Reynales-Shigematsu, et al. 2024), yet tobacco tax revenues, at 0.16 percent of GDP, are only a fraction of these costs. Improving these taxes in Mexico requires incorporating specific components in beverages that vary by alcohol and sugar content and setting high specific rates across all three product categories. Simultaneous implementation of other effective population-level interventions is necessary to have a comprehensive strategy to reduce preventable deaths. In the case of tobacco, other effective interventions include monitoring tobacco use and control policies, establishing smoke-free areas, providing cessation support, requiring health warnings on packaging, and enforcing bans on advertising, promotion, and sponsorship (WHO 2008). On alcohol, these include strengthened restrictions on alcohol availability, advanced and enforced drink driving countermeasures, facilitate access to screening, brief interventions, and treatment, and enforce bans or comprehensive restrictions on alcohol advertising, sponsorship, and promotion (WHO 2024a; WHO 2019). In SSBs and nutrition in general, including front-of-package labeling, marketing regulations, mass media and digital communication approaches, food fortification, and repurposing of public support for agrifood.
Users also downloaded
Showing related downloaded files
Publication Europe and Central Asia Economic Update, Spring 2025: Accelerating Growth through Entrepreneurship, Technology Adoption, and Innovation(Washington, DC: World Bank, 2025-04-23)Business dynamism and economic growth in Europe and Central Asia have weakened since the late 2000s, with productivity growth driven largely by resource reallocation between firms and sectors rather than innovation. To move up the value chain, countries need to facilitate technology adoption, stronger domestic competition, and firm-level innovation to build a more dynamic private sector. Governments should move beyond broad support for small- and medium-sized enterprises and focus on enabling the most productive firms to expand and compete globally. Strengthening competition policies, reducing the presence of state-owned enterprises, and ensuring fair market access are crucial. Limited availability of long-term financing and risk capital hinders firm growth and innovation. Economic disruptions are a shock in the short term, but they provide an opportunity for implementing enterprise and structural reforms, all of which are essential for creating better-paying jobs and helping countries in the region to achieve high-income status.Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Morocco Economic Update, Winter 2025(Washington, DC: World Bank, 2025-04-03)Despite the drought causing a modest deceleration of overall GDP growth to 3.2 percent, the Moroccan economy has exhibited some encouraging trends in 2024. Non-agricultural growth has accelerated to an estimated 3.8 percent, driven by a revitalized industrial sector and a rebound in gross capital formation. Inflation has dropped below 1 percent, allowing Bank al-Maghrib to begin easing its monetary policy. While rural labor markets remain depressed, the economy has added close to 162,000 jobs in urban areas. Morocco’s external position remains strong overall, with a moderate current account deficit largely financed by growing foreign direct investment inflows, underpinned by solid investor confidence indicators. Despite significant spending pressures, the debt-to-GDP ratio is slowly declining.