Abstract

Increased taxation on alcohol and tobacco is among the cost-effective measures used to deal with fighting the burden of non-communicable diseases (NCDs) globally. Despite adopting such efforts, its actual impacts are yet to be fully understood. Our study had two key questions: can heavy taxation breathe new hope into countries' efforts to combat NCDs as we approach the World Health Organization target of a 25% global reduction in NCD mortality rates by 2025? Can the approach recoup economic losses that have been brought by these conditions? Little is known about the answers to these questions, especially in low-income countries where NCDs are on the rise. The study’s objective is to address these key questions and find empirical evidence regarding changes in the NCD mortality rate associated with changes in the tax rates of tobacco and alcohol. The study adopted the System Generalized Method of Moments (SGMM) to explore the relationship between levels of taxes and NCD mortality rates. The SGMM allowed the inclusion of the dependent variable as an explanatory variable assuming there is reverse causality. There seems to be a negative relationship between increased taxes and rates of NCDs. These results suggest that to reduce NCDs, tax increases on the major risk factors must be implemented. Doing so will likely enable the achievement of Sustainable Development Goal 3.4 of reducing NCD mortality by one-third by 2030.

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School	: School of Law, Economics and Government
Issued Date	: 2024

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