and tobacco, which have repeatedly been shown to be effective in reducing consumption and improving health (see, e.g., Chaloupka, 1999; Wagenaar, Salois, and Komro, 2009). Data from 22 low-income countries suggest that a 50 percent increase in the excise tax on tobacco would bring in $1.4 billion of additional revenue to those countries (Stenberg et al., 2010). Such taxes are now also being explored for use in discouraging the use of foods high in sugar or salt. The share of the resources from sin taxes allocated to health spending—that are, in economics terms, hypothecated for health spending—will be, of course, one of the main issues from the health financing point of view. Intuitively, the case for allocating a large percentage of sin taxes to health spending seems compelling. From the point of view of national ministries of finance, however, this is not always the case, and ministries of health will need to be persuasive in order to receive at least a part of the revenue. Furthermore, ministries of health need to ensure that the eventual hypothecation of sin taxes to health spending will not lead to cuts elsewhere in the health budget. The same questions concerning hypothecation are, of course, equally relevant to other earmarked taxation mechanisms that do not fall under the “sin tax“ category.
Judging from the examples of countries that have already introduced them, a variety of other direct or indirect taxation mechanisms are also feasible. Ghana, for example, increased its value added tax by 2.5 percentage points; these revenues that go directly to the National Health Insurance System. Gabon introduced a specific tax on certain profitable economic sectors, such as agencies that receive and transfer money overseas; revenue from this tax is hypothecated to cover the insurance contributions of people who are financially unable to contribute to the national health insurance fund. In 2009 Gabon collected the equivalent of $25 million with this levy on highly profitable corporations (Musango and Aboubacar, 2010).