WHO’s ‘3 by 35’ Initiative: Tackling NCDs with Health Taxes

GS2 – Social Sector

Context:

The World Health Organization (WHO) has launched the 3 by 35 Initiative, targeting a 50% increase in the prices of tobacco, alcohol, and sugary drinks by 2035 through health-focused taxation, aiming to reduce the global burden of non-communicable diseases (NCDs).

Key Objectives:
  • Reduce NCD-related premature deaths by 50 million.
  • Mobilize $1 trillion in new public revenue by 2035.
  • Advance Sustainable Development Goal (SDG) 3.4, which seeks to cut premature deaths from NCDs by one-third.
Understanding Health Taxes:

Health taxes are excise duties levied on products that pose serious public health risks, such as tobacco, alcohol, and sugary beverages. These taxes function as price-based deterrents, discouraging consumption and improving public health outcomes.

Benefits of Health Taxation:
  • Reduces Consumption: Proven declines in usage of tobacco and alcohol.
  • Enhances Public Revenue: Offers a stable income source for healthcare, especially in lower-income countries.
  • Pro-Poor Outcomes: Poorer populations benefit more due to reduced illness and medical expenses.
  • Healthcare Savings: Lower incidence of NCDs reduces strain on public hospitals.
  • Industry Reform: Encourages reformulation of harmful products to reduce tax liability.
Challenges Faced:
  • Equity Concerns: May disproportionately affect low-income consumers.
  • Illicit Trade: Weak enforcement can lead to black-market growth.
  • Industry Resistance: Strong lobbying and legal pushbacks by affected industries.
  • Employment Risks: Potential job losses in the informal production sector.
  • Systemic Weaknesses: Poor tax infrastructure and fragmented laws hinder effectiveness.
India’s Health Tax Framework – Strengths and Gaps:
  • Current Structure: Combines GST and excise duties, but lacks a unified health policy approach.
  • Product-wise Overview:
    • Aerated Drinks: ~40% GST; limited deterrence.
    • HFSS Foods: No dedicated tax on high-fat, salt, and sugar products.
    • Cigarettes: ~60% taxation (GST + NCCD + state duties), while bidis and smokeless tobacco are under-taxed despite higher usage.
    • Alcohol: Taxed under state excise; excluded from GST.
Issues in Implementation:
  • Focus remains revenue-centric rather than health-oriented.
  • Tax disparity between products (e.g., cigarettes vs. bidis) undermines effectiveness.
  • Unregulated informal markets evade taxation.
  • Exemptions for small producers dilute tax effectiveness.
  • Lack of earmarking health tax revenue for disease control and treatment reduces policy impact.

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