‘Tax on alcohol, tobacco to benefit poor’

‘Taxes on unhealthy products can produce health gains for poor’

April 05, 2018 10:25 pm | Updated April 06, 2018 01:29 am IST - New Delhi

NEW DELHI, 25/11/2014:  The Health Ministry is likely to ban the sale of loose cigarettes and also impose higher fine for smoking in public. Also on the cards is a proposal to raise the age limit for buying tobacco products,
in New Delhi  on November 25, 2014. 
Photo: Meeta Ahlawat

NEW DELHI, 25/11/2014: The Health Ministry is likely to ban the sale of loose cigarettes and also impose higher fine for smoking in public. Also on the cards is a proposal to raise the age limit for buying tobacco products, in New Delhi on November 25, 2014. Photo: Meeta Ahlawat

Taxes on unhealthy products can produce major health gains for the poorest in society, especially if tax revenues are used to fund pro-poor programmes, noted a study published in the Lancet on Thursday. These unhealthy products include soft drinks, alcohol and tobacco.

It added that poor and uninsured households are more likely to incur catastrophic healthcare costs from non-communicable diseases (NCDs) and are more likely to forgo care for chronic health problems compared to higher income households.

Comprehensive analysis

The paper does a comprehensive analysis of evidence on expenditure, behaviour and socio-economic status, and brings together data from across the globe.

The five papers present strong evidence that taxes on unhealthy products have the potential to produce major health gains among the poorest in society, who are disproportionately affected by NCDs. The evidence helps counter fears that such taxes will necessarily disproportionately harm the poor.

NCDs — cancer, heart disease and diabetes — cause 38 million deaths each year, 16 million of these are among people aged under 70.

“NCDs are a major cause and consequence of poverty worldwide,” said Rachel Nugent from RTI International in Seattle, U.S., and Chair of the Lancet taskforce on NCDs and economics.

“Responding to this challenge means big investments to improve healthcare systems worldwide, but there are immediate and effective tools at our disposal. Taxes on unhealthy products can produce major health gains, and evidence shows these can be implemented fairly, without disproportionately harming the poorest in society,” added Dr. Nugent.

Meanwhile, the Lancet taskforce on NCDs and economics is a partner of the World Health Organization’s independent high-level commission on NCDs and will be launched at the WHO-NCD financing meeting in April.

Chronic diseases

Evidence from 283 international studies, including data from India, China and Brazil, shows that low socio-economic status is consistently associated with higher rates of non-communicable disease in low and middle income countries.

NEW DELHI, 14/12/2016: Wine and Beer Shop at Daryaganj, in New Delhi on Wednesday. 
Photo: Sandeep Saxena

NEW DELHI, 14/12/2016: Wine and Beer Shop at Daryaganj, in New Delhi on Wednesday. Photo: Sandeep Saxena

 

Furthermore, evidence from 66 international studies on 13 chronic diseases concludes that NCDs place a substantially higher economic burden on low income households compared to higher income households, especially in the absence of health insurance. Uninsured patients experienced a two to seven fold increase in the odds of catastrophic health spending compared with insured patients.

Even with protective health insurance, high levels of co-pays or a lack of coverage for specific treatments mean households can often experience catastrophic expenditure.

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