Promoting health taxation as solution to developing countries’ underfunded budgets A proposal by WHO’s Gordon Brown

As global health financing faces its steepest decline in decades, developing nations are being forced to rethink how they fund and sustain their medical systems.

The retreat of Western aid has coincided with a growing epidemic of non-communicable diseases, from heart conditions to diabetes, driven by rising consumption of tobacco, alcohol, and sugary drinks.

In this context, former British Prime Minister and current WHO Global Health Financing Ambassador Gordon Brown is calling for a global push toward “health taxes”—a strategy he says could simultaneously strengthen domestic health budgets and curb preventable deaths.

Global South countries, even as they face a growing epidemic of non-communicable diseases (NCDs) driven by the consumption of harmful products. Around the world, health systems are overstretched and underfunded. In 2023, low-income countries spent just $10 per person annually on health—less than 15% of what is needed to ensure access to essential services. The situation is worsening, with global health investment projected to fall by 40% this year, from around $25 billion in 2023 to $15 billion, largely due to recent aid cuts by the United States and Europe.

In an article for Project Syndicate, Brown writes that developing-country leaders are increasingly focused on strengthening health capacity in every sector, “from vaccine production to health-care delivery.”

According to Brown, “pressure must be brought to bear” on donor governments that have reduced aid to reconsider their stance. He argues that these governments should “provide a timeline for when they will help finance capacity-building efforts in countries with historically aid-dependent health-care systems.”

At the same time, the world is confronting a mounting crisis of non-communicable diseases, largely caused by the consumption of tobacco, alcohol, and sugary beverages, which kill more than ten million people each year. Urgent action is needed to curb these deaths and reduce disease, especially in low- and middle-income countries (LMICs).

Addressing these twin challenges—financing and prevention—requires new funding mechanisms and measures to reduce consumption of harmful products. Brown argues that “the way to achieve both objectives is health taxes,” an approach that aligns not only with the World Health Organization’s priorities but also with the 2023 G20 Independent Expert Group report on domestic-resource mobilization, co-chaired by Lawrence H. Summers and N.K. Singh.

According to a 2024 report from the Task Force on Fiscal Policy for Health, raising taxes on tobacco, alcohol, and sugary drinks by 50% could generate $3.7 trillion globally over five years, including $2.1 trillion from LMICs. That revenue could boost health-care spending in those countries by up to 40%.

If adopted widely, these taxes could have dramatic health benefits. “More than 100 million people would quit smoking,” the report estimates, while alcohol and sugary beverage consumption would decline sharply. Over the next 50 years, this could save 50 million lives and improve health outcomes for millions more, easing the strain on overburdened health systems.

Brown highlights successful examples of health taxation around the world. In the Philippines, tobacco excise tax hikes boosted revenue from $1 billion in 2012 to $2.9 billion in 2022, funding universal health coverage. In Pakistan, a 2022–23 tobacco tax increase resulted in a 50% year-on-year rise in revenue. In Lithuania, successive alcohol tax hikes led to alcohol taxes accounting for nearly 3% of total government revenue by 2022 while consumption declined. Mexico’s 2014 sugary beverage tax also proved highly effective, with every dollar spent on implementation saving $4 in health-care costs.

However, Brown warns that “powerful corporate interests are the biggest barrier” to enacting such taxes. These industries often work “behind the scenes to delay or dilute policy.” In 2022, the tobacco industry alone spent €19 million ($22.4 million) lobbying European Union policymakers, despite the WHO’s Framework Convention on Tobacco Control.

“We cannot allow well-funded lobbying efforts to obscure the reality that health taxes are highly effective, have few economic downsides, and enjoy broad public support. [...] The evidence is clear that these taxes generate much-needed government revenue and ease pressure on overburdened health systems,” Brown concludes.

By Nazrin Sadigova