Online Reporter
Prosper Ndlovu, National Editor
AMID rising debt burden, declining donor support and geo-political tensions threatening global economic value chains, Africa could leverage effective health taxes and strengthen excise tax administration as part of comprehensive domestic resource mobilisation strategies to support development programmes.
Only five years are left before the 2030 United Nations Sustainable Development Goals (SDGs) deadline, and yet many developing countries are still lagging behind in several aspects.
Official estimates indicate that Africa faces a staggering US$1.6 trillion development financing gap to meet some of these targets, requiring an additional US$194 billion annually.
The UN (2023) report suggests that implementation of several of the SGDs (including SDG 3 on health and well-being) is weak and insufficient, hence the heightened calls for increased investment in health systems to support countries in their recovery while building resilience against future health threats.
Similarly, studies suggest that domestic health spending in Africa generally falls below the recommended 15 percent target set by the Abuja Declaration, averaging only 7.3 percent in 2020.
This, coupled with donor dependency, recent external funding constraints, and rising debt burden facing many African States, has worsened the situation as many Governments spend more on token debt interest payments than on health or education support.
Africa generally has a concerning low Tax-to-GDP (Gross Domestic Product) Ratios averaging 15 percent, significantly below the OECD (Organisation for Economic Co-operation and Development) average of 34 percent, according to the African Tax Administration Forum (Ataf), a regional lobby organisation on taxation matters.
“Tax-to-GDP ratio in Africa is trailing behind global benchmarks,” says Ataf in its latest update shared with the media.
“In view of these challenges, health taxes are gaining increasing attention from finance and public health experts. For finance experts, they represent an underutilised source of Government revenue, especially in low- and middle-income countries.
“For public health experts, health taxes are seen as an effective tool to reduce the consumption of harmful products.”
Many Governments including Zimbabwe, charge excise duty on specific goods, such as tobacco, alcohol and sugar-sweetened beverages, to discourage their consumption, which harms public health and places a financial burden on society.
Last year, the Zimbabwean Government, for instance, collected more than US$30 million from the special surtax on sugar content in beverages following the gazetting of Statutory Instrument 16 of 2024, the Customs and Excise (Tariff) (Amendment) Notice, 2024 (No 5) on February 9, 2024.
The funds from the tax have also been earmarked for the procurement of cancer machines in public hospitals, which will significantly bridge the health funding gap.
An equivalent of about US$25,4 million has been raked in from the same tax head in the first half of 2025, according to the Treasury, which goes a long way in raising critical revenue for healthcare improvements, particularly for cancer treatment, which is increasingly becoming a health burden locally and globally.
Such “health taxes” work by increasing prices, making the products less affordable. There is consensus that revenue generated this way can then be used to fund public health initiatives, creating a positive feedback loop where reduced consumption of unhealthy products is paired with increased investment in health services.
Ataf is already supporting African countries including Zimbabwe on health taxation frameworks through a programme launched in 2023, initially focusing on tobacco taxation.
This initiative is designed to support African countries in tackling one of the world’s leading preventable causes of death — tobacco use — while simultaneously boosting domestic resource mobilisation.
According to Ataf, tobacco taxation is uniquely effective as it not only curbs consumption and prevents preventable deaths but also generates significant Government revenue.
Figures from the World Health Organisation (WHO) suggest that eight million tobacco-related deaths are recorded annually, and experts point to price increases as the most effective deterrent measure.
Thus, the initiative on tobacco taxation is expected to directly support broader development goals, aligning with both the UN (SDGs) and the African Union’s Agenda 2063.
However, ATAF warns that implementing effective health taxes is a multi-faceted challenge as it requires not only evidence-based policies but also the technical capacity to design them, a robust administration to enforce them and sustained political will.
“This complex interplay is precisely where ATAF’s integrated support for its members becomes critical,” said the agency.
With a membership now spanning 44 African countries, ATAF says it is leveraging its unique position to support members through critical initiatives.
These include advancing research and data to generate vital intelligence on tobacco taxation through its flagship publication, the African Tax Outlook (ATO), training and capacity building through the Tax Academy.
In this regard, ATAF has launched a specialised programme on tobacco and excise tax administration for African officials, which to date has trained officials from over 30 countries.
Other interventions include workshops and technical discussions on key topics such as combating illicit trade, availing tax policy and administration toolkits and guidelines, tailored technical assistance to member countries, as well as multi-stakeholder coherence and advancing the African voice in global taxation talks.
“ATAF continues to collaborate with strategic partners both globally and regionally including the UN, World Bank, OECD and WHO, among others.
“By fostering these collaborations, ATAF aims to ensure that African perspectives are effectively represented in global discussions on tobacco and health taxation, contributing to more inclusive and impactful policy making,” said ATAF.
