Mobilizing Health Taxes for Development - ADB-CGD Webinar

Hana Ross was a panelist on a virtual discussion on Mobilizing Health Taxes for Development. The webinar, which was held on 5 May 2022, was organized by the Center for Global Development and the Asian Development Bank.

Hana joined the expert panel to discuss tax design, demand responses, distributional consequences, the use of corrective tax revenues, and the role of the Asian Development Bank in supporting effective implementation of health taxes. She pointed out that there is scope for doing more on health taxes in developing Asia, but it is important to pay attention to both tax rates and tax structures. High rates cannot accomplish much without the proper tax structure. The tax administration also plays an import role, because without effective tax administration, policies alone cannot achieve the goals. The best recipe for success is (1) proper tax structure, (2) high tax rates and (3) effective tax administration.

The main presenter was Chris Lane from the Center for Global Development. The presentation was based on his recent background paper on health taxes for the report Asian Development Outlook 2022: Mobilizing Taxes for Development. The report highlights the challenge of domestic revenue mobilization, focusing on corrective taxes on tobacco, alcohol, and sugar-sweetened beverages.

Corrective tax revenues are effective in reducing consumption of harmful products, yet remain modest compared to the productivity loss from death and disability, and the costs of medical treatment. It is estimated that corrective taxes, primarily on alcohol and tobacco, could raise an additional 0.6-0.7% of GDP in revenues, while improving health outcomes and cutting medical costs.

Hana also talked about her publication that analyses the tax gaps in South East Asia, and her technical assistance to tobacco tax policy reform in Indonesia. She pointed out that the FCTC Knowledge Hub on Tobacco Taxation at UCT is a valuable resource available to countries to support the implementation of corrective tax reforms.

Hana was joined on the virtual stage by Arin Dutta from the Asian Development Bank, Jeremias Paul from World Health Organization, and Xavier Mitchell from Cook Islands Ministry of Finance and Economic Management.