Context: World Health Organisation (WHO) has launched the “3 by 35” Initiative calling on countries to raise ‘Health tax' or ‘Sin tax’ on tobacco, alcohol, sugary drinks by at least 50% by the year 2035.
Relevance of the Topic: Prelims: About the 3 by 35 Initiative.
WHO’s 3 by 35 Initiative
- It is a global effort to increase the real prices of any or all of three unhealthy products – tobacco, alcohol, and sugary drinks by at least 50% by 2035 through tax increases, while taking into account each country’s unique context.
Key action areas of the Initiative:
- Cutting harmful consumption by reducing affordability: Increase or introduce excise taxes on tobacco, alcohol, and sugary drinks to raise prices and reduce consumption, cutting future health costs and preventable deaths.
- Raising revenue to fund health and development: Mobilise domestic public resources to fund essential health and development programmes, including universal health coverage. The initiative aims to raise $1 trillion over the next 10 years.
- Building broad political support across ministries, civil society, and academia: Strengthen multi sectoral alliances by engaging ministries of finance and health, parliamentarians, civil society, and researchers to design and implement effective policies.
Significance of Health Tax/ Sin Tax:
- Prevent global NCD burden: Consumption of tobacco, alcohol and sugary drinks is fuelling the Non-Communicable Diseases (NCD) epidemic which accounts for over 75% of all deaths worldwide. A recent report shows that a one-time 50% price increase on these products could prevent 50 million premature deaths over the next 50 years.
- Augment shrinking development aid and growing public debt: These taxes cut the consumption of harmful products and create revenue governments can reinvest in healthcare, education and social protection.
India's Efforts
- India has implemented tobacco taxation under the GST framework, with 28% GST and an additional compensation cess on cigarettes and select products.
- However, bidis (smoked by low-income groups) and smokeless tobacco (SLT) (used by over two-thirds of tobacco users) remain under-taxed.
India’s current approach to taxing tobacco, alcohol and sugar-sweetened beverages represent a fragmented, revenue-centric model that lacks a coherent public health framework.