There are many examples from tobacco, alcohol and gambling control that demonstrate the success of sin taxes (though Texas made a disastrous attempt at taxing stripper clubs in 2008, the so-called ‘pole tax’, a move followed by 12 more American states with variable success). In Mexico, the introduction of a one peso tax (approximately 10% increase) on soda drinks in 2014 has led to reductions between 6-12% in consumption. Nearly 30 countries use taxes from tobacco to finance health spending. The Philippines has been able to finance health insurance for 14 million elderly, informal workers and urban poor under the Philippine Health Insurance Corporation (PhilHealth), financed largely from taxes from tobacco. India uses contributions from tobacco taxes to fund welfare activities for tobacco workers and the National Health Mission.

Modelling exercises also show that taxes on demerit goods can lead to substantial health gains, and not only fill government coffers. One study found that in 89 LMICs, a $10 per-capita increase in tax revenue led to an additional $1 spent on public health. In France, progressive tax increases on tobacco since the 1990s have been associated with a 50% reduction in lung cancer rates. Another study on 181 countries suggests that a $1 increase in the price of a pack of cigarettes globally can avert 15 million smoking-attributable deaths. Studies from Australia, Ecuador, India, and the United States also suggest significant health gains from sin taxes. Conversely, studies have shown that lowering taxes on tobacco and alcohol can be detrimental – the 2004 lowering of alcohol excise in Finland has been estimated to cause an additional 8 alcohol-positive deaths per week.

Having said that, in a country like Finland, you probably need some strong liquor to get you through the winter days. So maybe there’s a case to be made for “summer-only” alcohol taxes in Scandinavia (or Russia, for that matter)? Along the same lines, temporary ‘sugar tax’ exemptions might be warranted when your boyfriend/girlfriend just dumped you, and ‘for one night only’ tobacco tax exemptions when you just made love like in an Alain Delon movie (and crave for a cigarette). Call it ‘context-specific’ taxing. Should be easy to implement in an era with less and less privacy.

Anyway. In the wake of evidence from all parts of the world on the potential of sin taxes to simultaneously contribute to the state exchequer as well as bring about reductions in disease burden, what is it about them that incites such strong responses? Although the term ‘sin tax’ is perhaps not a very smart choice – except for the US, a country full of sinners (self-proclaimed and otherwise) – I don’t think the term itself is the key explanation for the backlash. In my view, it is that people don’t like being told what to do, even when it is in their best interests. So whether you call it a soda tax, sugar tax, sin tax or whatever, people cherish the idea (it’s mostly a dream, actually) of having autonomy, of being “free”. Even more so when they don’t exactly know the use their extra contributions will be put to. Which brings up another much vilified word for governments – earmarking. Unless people know why taxes are being raised and how their money will be used to benefit them, public opinion will continue to be swayed by influences from big industry about nanny states and government paternalism. The fact that high-net-worth individuals and multinationals don’t seem to pay much tax altogether, doesn’t help much either. It feels like governments are going after the ‘easy’ money, i.e. of ordinary citizens. Only the average Joe is a “sinner” for our governments, tax-optimisers/dodgers tend to be ‘innovative entrepreneurs’, ‘winners’ and/or ‘creative disruptors’ – i.e. the heroes of our times.

A final comment. Sometimes there are no choices – people are forced to choose among equally bad alternatives, where the lowest priced, affordable options provide an appalling point of access that no amount of increasing tax can ameliorate. For example, if $1 will only get a large bag of chips, and not the delicious plate of curried vegetables that one had imagined. It is this aspect that has to be tackled alongside tax increases, for people to warm up to the idea of sin taxes.

After all, hell is supposedly full of sinners. And that’s a pretty warm place, from what I’ve been told.

(Kristof Decoster provided some feedback on an earlier draft by Swati)

The 17 SGD goals encompass (as of now) 229 indicators, many of which have “unresolved issues” or require further deliberations. While criticism of the indicators is widespread, from there being too many in number to prioritize (see the redefined acronym “Senseless, Dreamy, Garbled”), to the ambiguous logic behind set targets and levels (the infamous poverty line, for example), the Indian establishment has already expressed its reservations on its ability to monitor the indicators. The CEO of the Niti Aayog, the replacement for the erstwhile Planning Commission of the Government of India (GoI), has gone on record to state that they have been struggling to monitor 25 core indicators for India’s five year planning cycles, and that “How then would India manage to meet all the 169 targets that are now being set?”

This cautious trepidation can be understood by examining India’s capacities to monitor the proposed, non-fuzzy, ‘green’ indicators, for example in the thematic area of health. With the demographic transition, non-communicable diseases (NCDs) are the leading cause of burden of disease in India. Under the proposed target 3.4, under SDG Goal 3, the indicators are as follows: “By 2030, reduce by one third premature mortality from non-communicable diseases through prevention and treatment and promote mental health and well-being”, “Coverage of treatment interventions (pharmacological, psychosocial and rehabilitation and aftercare services) for substance abuse disorders.” and “Harmful use of alcohol defined according to national context as alcohol per capita (15+ years old) consumption within a calendar year in litres of pure alcohol”. While these may seem relatively straightforward, India lacks the resources to comprehensively implement and monitor such metrics and interventions. Current burden of disease estimates are based on modelling exercises and various assumptions, in the absence of information systems to monitor morbidity and mortality from all sources and service providers. The national Health Management Information System covers only government facilities, leaving out the majority of ambulatory and inpatient services that are availed in private facilities, and use of collected data is fragmented and feedback mechanisms rudimentary. The National Programme for Prevention and Control of Cancer, Diabetes, Cardio-vascular Diseases and Stroke has been designed by the Ministry of Health and Family Welfare (MoHFW) to monitor NCD prevalence and provide preventive and curative services. However, nearly 8 years after inception its activities remain confined to two pilot districts each in nine states, leaving nearly 670 out of 688 districts with no coverage. Some states, such as Kerala and Tamil Nadu have undertaken state-level programs and initiatives to cover all districts in the state with a basic package of NCD services. Information on the nature of services and coverage of substance use disorders is non-existent, as is information on per capita alcohol consumption in the country. Consumer expenditure surveys that currently measure household alcohol consumption approximate consumption volumes that are a miniscule proportion of sales data from states. India also does not have a clear roadmap for operationalizing universal health coverage and interventions required to meet SDG goals, and much of the developments are at the sub-national, driven by interventions in richer, more progressive states like Kerala, Karnataka and Tamil Nadu.

Notwithstanding the ability of proposed indicators to measure intended outcomes, the lack of routine data to monitor progress will be a big challenge in the country. Since the proposed SDG framework calls for information disaggregated by income, sex, age, race, ethnicity, migratory status, disability etc, the data systems needed will be immense. Even more challenging will be collecting information on inter-sectoral indicators, such as the linkages of health to air and water quality, and climate change. Increasing capacities, both human and financial, to develop and implement robust monitoring mechanisms will also be a huge task in the future. Perhaps some sort of knowledge translation will also be required, especially considering the multiplicity of actors involved, such as the industry, civil society, and state and local governments, to implement these monitoring systems. Stewardship of the entire exercise also has to be decided.

It took many years for the Millennium Developmental Goals to catch on in national and sub-national policy circles; there is an urgent need to hit the ground running, both in terms of interventions and monitoring, in order to achieve SDG goals within the stipulated time frame.

The author benefited from discussions with Bhargav Krishna on this topic.

Various themes addressed in the past WNTDs include gender and tobacco and marketing to women; “tobacco kills”; bans of tobacco advertising, promotion and sponsorship, among others. The theme for this year’s WNTD is “Raise taxes on tobacco”, to levels that are effective to reduce consumption.  It includes increasing existing tax rates, moving away from import duties, adopting a simpler tax system, reducing tax differentials amongst tobacco products, and reducing illicit trade.

Price increase, by means of increased taxation or otherwise, is considered to be the single most effective method to decrease consumption and encourage tobacco users to quit. The implementation of tax and price policies to reduce tobacco consumption is recommended by the Framework Convention on Tobacco Control (FCTC), WHO (Article 6, 2005). Consistent evidence demonstrates the effects of higher prices on tobacco products on decreased consumption and initiation of use, above all among adolescents and persons belonging to lower socio-economic strata.  In high income countries, estimates of the price elasticity of cigarette demand range from −0.25 to −0.50, while those from low- and middle-income countries range from −0.50 to −1.00, suggesting that a 10% increase in cigarette prices will lead to reductions in cigarette consumption of 2.5-5% in high income countries and 5-10% in low income countries. Low income countries are important to focus on for other reasons: a larger, younger demographic; lax laws and policies; and being the focus of multinational tobacco companies looking to expand their markets.

While there are almost 6 million deaths attributed to tobacco use every year across the world (with 600,000 of these occurring in non-smokers due to second hand smoke), only 8% of the world’s population lives in countries with tobacco taxes at recommended levels. More than 80% of total tobacco deaths are among people living in low-and middle-income countries. According to WHO figures, in 2012 only 32 countries in the world had complete policies in line with guidelines recommended in the FCTC. Tellingly, 104 countries had minimal or no tobacco taxation policies in place. When we break up countries by income status, the picture is even gloomier, with only 11 middle-income and 1 low income countries meeting the recommended benchmark of the total tax on cigarettes constituting 75% of the total retail price. Again, 96 middle income and 30 low income countries have cigarette taxes less than 50% of the total retail price.

Raising tobacco taxes has to go hand in hand with improving measures to increase tax compliance and governance, especially for indigenous tobacco products such as chewed forms of tobacco, bidis, kreteks, etc which have been traditionally subsidized, excluded from taxes or taxed very low in comparison to cigarettes. Also, tax increases must be both indexed to inflation and account for the rise in incomes in growing economics, if they are to be effective, as was seen in the case of Brazil between the years 2007-11.

The tobacco industry, their front groups and governments which are stakeholders in the tobacco supply chain have become more vocal in the run-up to this year’s WNTD. In Bahrain, a move by the government to triple cigarette taxation has been criticized by industry as a violation of the Free Trade Agreement (FTA) that Bahrain has signed with the US. Ten days ago, tobacco company representatives reportedly met a visiting US Trade Department official to discuss the planned increase in taxes. Another study from Australia released a week ago suggests smuggling of tobacco will increase due to the regular increases in tax proposed by the government. Other reasons for concern include the global push to reduce trade restrictions, including those on tobacco. The Transatlantic Trade and Investment Partnership and the Trans-Pacific Partnership give tobacco companies “a new place to take disputes — a tribunal that stands separate from and above domestic legal systems.” Tobacco companies took governments in Uruguay and Australia to court; and on the other side of the fence, Indonesia, Ukraine, the Dominican Republic, Honduras, and Cuba have challenged what they have perceived to be discriminatory practices for their tobacco products in the World Trade Organization.

Increase government revenue from tobacco taxation provides an innovative financing mechanism for health, especially if the revenues are earmarked for specific health goals. In India, the total central excise (excluding state revenues) accrued from all tobacco products in 2010-11 amounted to nearly 80% of the total actual expenditure on health and family welfare by the central government, and total tobacco revenues can be used to fund health programs. At present, India levies certain taxes to fund the National Rural Health Mission, but the rates of these are very low. Costa Rica has been a world leader in implementing a phased tax increase with revenue earmarked for tobacco control and other health initiatives. However, the basis of increased taxation must be for the goal of deterring consumption, regardless of revenue generation, which is an additional bonus.

Let’s see whether Mr. Modi thinks likewise in India. But in any case, it doesn’t seem to be mainstream thinking in the global health community – who tend to link sin taxes more and more to financing of Universal Health Coverage in LMICs.