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The role of the tobacco tax and universal health coverage

The World Bank President spoke his mind about the importance of tobacco tax to achieve health coverage

LinkedIn, May 11, 2018

On December 22, The World Bank President Jim Yong Kim published an article on Linkedin explaining the importance of universal health coverage (UHC) and how to achieve it.

According to the President of the World Bank, these are the reasons to invest in UHC: 1) it attacks poverty by protecting people from diseases and from excessive health expenditures; 2) accelerates inclusive growth, returns on investment are greater than the 1 to 1 ratio; 3) it stimulates the health sector and creates jobs, 4) it helps to build human capital, which is considered one of the most powerful engines of sustainable and inclusive growth.

President Kim pointed that he was present at the Universal Health Coverage Forum held in Tokyo in 2017, and perceived a great political boost among the participants, but when seeing the investment figures, things change. As he explains, most developing countries prefer to invest their budget in infrastructure rather than in health, unless resources are obtained from donors to do so.

In view of the above, President Kim proposed making a ranking of countries based on the investment of human capital. He explained that, although controversial, it is the clearest way to demonstrate to the national finance authorities the consequences of not investing in their citizens.

About the constant question: where do you get the money to pay UHC? Coming from finance ministers and heads of state, Kim gave several alternatives for this constant concern, among them: Strengthening tobacco tax programs, which are a win-win both for public health and domestic revenue generation

Kim presenting the tax on tobacco as a significant source of income to achieve the objective of UHC ratifies that it should be a measure that should be bet by national authorities. But the benefits are not exclusively for the Treasury. The reason why the Ministries of Health should bet is because of its cost effectiveness to reduce consumption and therefore, to reduce health costs due to smoking.

It is great news that the tobacco tax is considered a key measure to achieve the UHC objective of the 2030 agenda. We hope that it will be a call for the governments of the region that are still timid with these taxes to implement adjustments and also for that the countries that already implemented measures continue to increase them according to the health objectives.

To read Jim Kim's full publication, click here