Chapter 2, the Special Feature of this report, examines the growing prominence of health taxes in OECD countries and their importance within the revenue mix. Using detailed Revenue Statistics data on excise taxes on alcohol, tobacco and sugar-sweetened beverages, the chapter investigates how these revenues evolved in the period from 2000 to 2022.
Revenue Statistics 2024
Health Taxes in OECD Countries
Revenue Statistics
Abstract
Over the past 20 years, OECD countries have reconceptualised existing taxes and introduced new taxes in response to a growing awareness of the impact that taxation can have on health outcomes. The concept of ‘health taxes’ has emerged to describe fiscal instruments whose purpose is not only to generate public revenues but also to reduce consumption of products that can have harmful effects on the health of consumers and society at large. This two-fold impact makes health taxes of interest both to fiscal policymakers and health policymakers in OECD countries and beyond.
The purpose of this Special Feature is to track recent trends in revenues from health taxes in OECD countries, benefitting from the granular data provided by countries for this edition of Revenue Statistics. In so doing, the report (and accompanying Revenue Statistics database) addresses a specific constraint on the analysis of health taxes, namely the absence of comprehensive and standardised data on revenues from health taxes over time that facilitates monitoring and benchmarking within and across countries. The objective of the Special Feature is not to carry out in-depth analysis, derive specific conclusions or present policy recommendations concerning the design of health taxes but rather to enhance the evidence base for specialists working in this area.
The chapter is structured as follows. The first section defines health taxes and outlines their emergence as a tool for fiscal and health policy in OECD countries. The second section explains the importance of analysing revenues from health taxes while acknowledging the limitations of this analysis. The third section uses Revenue Statistics data to track trends in revenues from health taxes across OECD countries. A fourth section concludes.
This Special Feature adheres to the World Health Organisation definition of ‘health taxes’, namely ‘[T]axes levied on products that have a negative public health impact’ (World Health Organization, 2024[1]). The classification of taxes in this chapter follows that set out in the OECD’s Interpretative Guide, whose definition of taxes is consistent with that of the System of National Accounts: compulsory, unrequited payments to the general government or to a supranational authority.
Health taxes are generally levied in the form of excise duties, which (unlike other general goods and services taxes) are levied only on specific goods. Although excise taxes are generally levied on producers rather than consumers, they nevertheless change the price of the product for consumers if producers pass on the taxes. In the case of health taxes, excise taxes can be levied directly on the component that creates negative health effects (e.g. alcohol volume or grams of sugar, salt or saturated fat) or on the product that contains the component that is harmful to consumers’ health (e.g. per litre of soft drink or alcoholic beverage or per pack of cigarettes). They can also be levied when these components or products are used as inputs in the production process.
Excise duties apply to goods regardless of whether they are produced domestically or imported, and they do not apply to exported products. Excise taxes interact with customs duties as well as the value-added tax (VAT); although this chapter focuses on revenues from excise taxes rather than customs duties and VAT, Box 2.1 provides additional detail on this interaction.
Since the Interpretative Guide classifies taxes according to their base, it does not include a specific category for ‘health taxes’. However, detailed data on tax revenues provided by countries through the Revenue Statistics initiative and classified according to the Interpretative Guide allows for the identification of different tax types that fall under this definition. As was the case with the Special Feature on environmental taxation in the 2019 edition of the report (OECD, 2019[2]), this chapter demonstrates the value of harmonised data in providing a comprehensive and internationally comparable view of revenues from taxes that have in common a specific policy objective of growing importance to OECD countries.
Notwithstanding the potential breadth of the WHO definition of health taxes,1 this chapter will focus on excise taxes on alcohol, tobacco and sugar-sweetened beverages (SSBs)2. Of these three types of health tax, taxes on alcohol and tobacco predate the term ‘health taxes’ by many centuries, over which time they have been implemented worldwide. Taxes on SSBs, on the other hand, are a relatively recent innovation and are less common globally, although this is changing rapidly. All OECD countries tax alcohol and tobacco while an increasing number tax SSBs, although data is only available for 12 countries in this chapter (OECD, 2022[3]).3
The emergence of ‘health taxes’ as a concept first arose from developments not in tax policy but in the health sector (Lauer et al., 2022[4]). The effectiveness of what were sometimes referred to as ‘sin taxes’ on tobacco and alcohol as health interventions became a topic of interest when policy makers began to take a more comprehensive view of public health systems. Amid widespread evidence that taxation was a cost-effective mechanism for improving health outcomes by reducing the consumption of harmful goods (and encouraged by broader fiscal challenges in the wake of the Global Financial Crisis), policy makers focused on the taxation of SSBs to improve nutritional outcomes and tackle rapid growth in the prevalence of obesity (Lauer et al., 2022[4]).
Health taxes thus have two principal purposes. On the one hand, they have been shown to generate a modest but stable source of revenues to finance public spending (Lauer et al., 2022[4]). On the other, they aim to reduce consumption of unhealthy goods for public health purposes. A tension exists within these objectives, namely that lower consumption of a specific good (ceteris paribus) entails a reduction in revenues. Although the design of health taxes is beyond the scope of this chapter,4 factors that may influence the rate at which policy makers set health taxes as they balance these objectives will be influenced (inter alia) by the elasticity of demand with respect to prices of the different products and the externalities and internalities associated with consumption of the product.
The question of elasticities demonstrates how the dual impact of health taxes can influence the design of health taxes. If demand for a product is inelastic (i.e. demand diminishes relatively little in response to prices), governments may be able to increase tax rates on that product to generate higher revenues without significantly reducing demand (absent an increase in cross-border shopping, smuggling or illegal production, as discussed below). However, this same inelasticity would imply that health taxes would have to be increased significantly before they trigger a strong demand response.
In practice, demand for alcohol and tobacco has generally been found to be relatively inelastic with respect to prices, while demand for SSBs is more elastic (Burton et al., 2024[5]). However, elasticity estimates for the different taxes vary in countries at different incomes levels, as well as across different income groups; elasticities tend to be higher among low-income individuals, implying their consumption declines more in response to increased prices (Fuchs, 2019[6]).
Meanwhile, policymakers may want to set rates that account for the adverse impact of certain products on consumers and society. In the case of health taxes, internalities can be understood as the harm individuals inflict upon themselves on account of their failure to recognise the adverse short- and long-term consequences of consuming these products. Externalities, meanwhile, include the economic costs5 for society but not taken into account by smokers. They may include costs for the smokers themselves as well as costs for individuals, such as the impact of passive smoking or the emotional burden of caring for or losing a loved one due to illness (DeCicca, Kenkel and Lovenheim, 2022[7]).
Setting excise rates to reflect the full range of externalities is very complicated. Some of the external costs are already priced into social insurance mechanisms and it is challenging to value in monetary terms the lives of (for example) smokers and second-hand smokers that are lost as a result of smoking. Instead of seeking precise external cost estimates, simpler approaches include tax level targets or smoking reduction goals. Taxes account for at least 60% of the purchase price of a pack of cigarettes in almost all OECD countries, while the World Health Organisation recommends this proportion be at least 75% (OECD, 2022[3]).
The concept of health taxes thus brings together old and new taxes on a wide range of products under a similar logic that recognises the impact of these instruments on consumer behaviour, health outcomes and public finances. These impacts are likely to span a range of timeframes, including from a fiscal perspective: a tax may not generate significant revenues in the short term but may achieve long-term savings for the government on the basis that healthier lifestyles would reduce public health costs over time.
Excise taxes, classified under category 5121 of the Interpretative Guide (Annex A), are taxes levied as a product specific unit tax on a predefined limited range of goods. Excises are often levied on nonessential or luxury goods, alcoholic beverages and tobacco products, as well as on energy products. Excises may be imposed at any stage of production or distribution and are usually assessed as a specific charge per unit based on characteristics by reference to the value, weight, strength, or quantity of the product. However, excises are not the only taxes imposed on these products, which will also be subject to value-added tax (VAT), customs and other import duties. Australia and New Zealand, for example, levy ‘excise-equivalent customs duties’ on alcohol and tobacco that are included in this analysis.1
Value-added tax (VAT) is a general consumption tax, which cannot be classified as a health tax. It is therefore not discussed in this chapter. It is, however, important to bear in mind how VAT interacts with excises and the impact this may have on government revenues as well as on the health-related objectives. In most cases, excise duties are part of the VAT base because a VAT is generally levied on the total value of the products, inclusive of excise duties.
In these situations, an increase in excise duties will also increase the VAT burden and revenue on the targeted products. The higher the rate of VAT, the greater the impact of (the increase in) excise duty that has to be paid. On the other hand, if health taxes reduce demand for a certain good, this will reduce revenues from both excises and VAT. The close relationship between VAT and excises implies that health taxes and VAT should ideally be evaluated jointly. For instance, applying a reduced VAT rate on SSBs may partly offset the impact of excises on the same products and would undermine the coherence of tax and health policy.2
Meanwhile, the customs duties that countries apply to imports of harmful products also generate revenues for the government and affect the prices of these goods at the border. This chapter does not cover customs duties in its data and analysis but these revenues can be significant.
Like other excise duties, health taxes are usually levied at the producer level and not on final consumers. This reduces the administrative burden and the risk of non-compliance but creates opportunities for suppliers to manipulate the tax base and affect prices, thereby undermining the effectiveness of health taxes in reaching its health objectives.
1. Please consult (Australian Taxation Office, 2024[16]) for additional information on the excise-equivalent customs duties in Australia and (New Zealand Customs Service, 2024[14])for New Zealand.
2. Chile levies an indirect tax on alcohol and SSBs, respectively, which are classified as “Tasas especiales del impuesto al valor agregado” (or “VAT special rates”); revenue raised from this tax are not classified as an excise in Revenue Statistics and thus not included in this chapter.
The recognition that health taxes have the capacity to generate revenues and improve health outcomes – and that these impacts may occur over different timeframes – entails trade-offs that policy makers must manage. Although revenues from health taxes are only part of the equation, high-quality and standardised revenue data is an essential input for understanding the role of health taxes in public finances and for evaluating their effectiveness. Nonetheless, revenue trends need to be treated with caution.
Although (as will be discussed below) revenues from health taxes amount to a relatively small proportion of GDP and are a small component of the overall tax mix in OECD countries, a reduction in revenues from these taxes where these previously represented a steady source of income for the government may have adverse consequences for the financing of public services. Over the longer term, a reduction in health revenues may be offset by future savings in health expenditure or higher revenues from a more productive population if the health tax succeeds in improving a specific health outcome or outcomes.
Revenue data is a key input for designing and monitoring the effectiveness of health taxes. The revenue impact of a health tax will reflect a range of design aspects, including tax rates, the tax structure, and the tax base. Health tax revenues will not only depend on the design of the health taxes but also on the levels of consumption (e.g. smoking prevalence) and other economic elements (e.g. extent of cross-border shopping). While health tax revenues on their own do not allow to infer whether a health tax is designed effectively, they constitute an important variable to assess a country’s health tax policy.
Despite the importance of tracking revenues from health taxes, analysing this data requires caution. A decline in revenues from a health tax on a specific product might be a sign of success if the purpose of the tax were to deter individuals from consuming that product. However, the positive health impact will be diminished if consumers switch to a cheaper product that is a close substitute which is not taxed in the same way and itself has adverse health impacts, such as from cigarettes to vaping.
Another factor that may not be apparent from the revenue data is the extent to which a health tax is passed on to consumers. As mentioned above, excises are generally applied at the producer level; the extent to which retailers pass on the health tax to consumers through higher prices will affect the impact on revenues and health outcomes. Numerous factors affect the extent of ‘pass-through’, including the structure of the industry, the possibility of tax avoidance and the specific design of the tax (Belloni and Sassi, 2022[8]). If producers absorb a higher excise tax within their profit margin, the increase in the rate may not lead to the intended decline in consumption.
The impact of health taxes on revenues (and health outcomes) will be affected by individuals who cross international borders to buy a specific product in response to differences in prices between the two jurisdictions that may be related to lower tax rates. Attesting to the potential scale of this phenomenon, (Hillion, 2024[9]) estimates that border closures related to the COVID-19 pandemic increased domestic tobacco sales in France by 9.5%, compared to the counterfactual if borders had stayed open. An analogous phenomenon may occur within countries where neighbouring sub-national jurisdictions impose health taxes at different rates (Bollinger and Sexton, 2023[10]).
In addition to legal transactions, revenues may also be affected if products are smuggled across borders to avoid taxes. Illicit production and sale of a particular good within a country’s borders will also result in foregone revenues as well as (potentially) worse health outcomes if the product is sub-standard.
This section shows trends in health tax revenues across OECD countries. As explained in Box 2.2, this data was submitted by delegates for this edition of Revenue Statistics. It covers the period from 2000 up to 2022, the most recent year for which final Revenue Statistics data is available for all OECD countries. Figures 2.1-2.3 show revenues from taxes on alcohol, tobacco and SSBs as a percentage of GDP and total government revenues (i.e. their weight within the tax mix) in 2022 as well as trends in revenues from health taxes since 2000. Table 2.A.1. sets out which countries are included in the respective graphs.
As noted above, the results shown in this section need to be interpreted with caution. First of all, these results only include revenues from excises. Notably, they do not include taxes on imports of alcohol, tobacco and SSBs, which means they may understate the taxes levied on these products. Moreover, there are challenges with the comparability of the data that are explained further in Box 2.2.
While there is a clear rationale for tracking revenues from health taxes, comparing revenues from health taxes across countries and over time has been challenging in the absence of a centralised repository for data on health taxes.
The revenue data for excise taxes shown in this chapter was provided as part of the data submission for this edition of Revenue Statistics. OECD countries are not required to report revenues from specific excises but provided significantly more-granular data on revenues from health taxes to inform this Special Feature, meaning that the results shown in this chapter have not been published previously here or elsewhere.
Although data has been provided by all countries, countries may not have been able to provide data on all revenues from health taxes. This might be because some health taxes are collected at a sub-national level and not reported to Revenue Statistics with sufficient granularity to be included in the analysis. This is the case for the United States, for example, which taxes alcohol and tobacco at a federal, state and local level but only taxes SSBs at a local level; the disaggregation of revenues from SSBs at local level is not available for this analysis.
Differences in how OECD countries label or the extent to which they report revenues from health taxes limits the comparability of revenues from health taxes across countries. Even within the categories chosen for analysis in this Special Feature – alcohol, tobacco and SSBs – there are differences and gaps across countries that limit the comparability of this data.
For example, OECD countries often may not differentiate between taxes on different alcohol products when reporting revenues. Some might report a single figure for revenues from taxes on alcohol while others will specify revenues from taxes on certain specific alcohol products – wine, beer or spirits for example – but not others.
The variance is greatest in the domain of SSBs. As noted above, although many OECD countries have introduced taxes on SSBs, the breadth of coverage differs significantly and not all countries report revenues from SSBs on a disaggregated basis, notably in cases where the taxes are implemented sub-nationally.
Further challenges may arise depending on which level of government has responsibility for excises. If a sub-national government has responsibility, issues such as missing data and differences in classification may be magnified considerably.
Secondly, caution is required when comparing revenues across countries for reasons that extend beyond these data challenges. Relatively high (low) revenues from a specific health tax may indicate that consumption of that product is relatively high (low) rather than that product being taxed more or less effectively. As an example of how prevalence varies across OECD countries, the proportion of individuals aged 15 and over that smoke daily ranges from 7.2% in Iceland to 28.0% in Türkiye according to (OECD, 2023[11]). In addition, it should not be assumed that a higher (lower) level of revenues from health taxes in a country or countries is a result of higher (lower) tax rates.
A range of other factors may affect the revenue trends shown in the graphs. For example, a decline in revenues might attest to the success of a tax whose principal objective is to reduce consumption of a specific product but it may also (for example) be a consequence of an increase in the number of consumers acquiring the product abroad. Depending on the denominator, the decline may also be a result of economic growth (when considering revenues as a share of GDP) or increases in revenues from another tax or taxes (when considering revenues as a share of total tax revenues).
Revenues from health taxes across OECD countries in 2022
Figure 2.1 shows the breakdown of revenues from excise taxes on alcohol, tobacco and SSBs across OECD countries as a percentage of GDP (Panel A) and as a share of total government revenues (Panel B) in 2022. For both indicators, there is wide variation across OECD countries in terms of the overall weight of health taxes. Annex Figures 2.A.1 and 2.A.2. show the disaggregation of revenues from the different excise taxes by product in 2022 both as a share of GDP and percentage of total tax revenues.
Total revenues from the three health excise taxes ranged from 0.19% of GDP in the United States to 1.42% in Latvia, while they ranged from 0.70% of total tax revenues in the United States to 4.62% in Latvia and 4.74% in Türkiye. On average across OECD countries, the health excise taxes on tobacco, alcohol and SSBs equated to 0.74% of GDP and generated 2.24% of total tax revenues in 2022.
In 27 of the 38 OECD countries, revenues from excise taxes on tobacco were the principal source of health tax revenues, exceeding 50% of total revenues in 25 of these. As a percentage of GDP, revenues from tobacco taxes ranged from 1.15% in Luxembourg to 0.05% in Costa Rica. As a proportion of total tax revenues, they ranged from 3.0% or more in Türkiye and Luxembourg to 0.20% in Costa Rica.
In the remaining countries, excise taxes on alcohol were the next-largest source of revenues in 2022. Revenues from excises alcohol ranged from above 0.6% of GDP in Latvia, Estonia, Lithuania and Iceland to 0.1% in Switzerland. As a proportion of total tax revenues, they ranged from above 2% in Latvia, Colombia, Lithuania and Estonia to below 0.2% in Switzerland, Austria and Italy.
Revenues from excises on SSBs in the 12 countries for which data for 2022 is available ranged from 0.69% of total tax revenues in Mexico to less than 0.05% of total revenues in France, the United Kingdom and Ireland. As a share of GDP, they exceeded 0.1% in Mexico and Costa Rica, at 0.12% and 0.11% respectively.
Note: Health excise tax revenue is the sum of reported tax revenue collected from excise taxes levied on tobacco, alcohol and SSBs (category 5121) for all reporting countries and years. The OECD average for health excise tax revenue is calculated based on 38 countries for tobacco, 37 countries for alcohol and 12 countries for SSBs (Annex Table 2.A.1.shows a list of reporting countries).
Source: Authors’ calculations based on data provided to OECD Revenue Statistics 2024 for all countries and years.
Long-term trends in health tax revenues
Figure 2.2 shows trends in revenues from total health taxes across the three categories on average across OECD countries from 2000 to 2022 as a share of GDP. Revenues from health excise taxes have declined as a proportion of GDP over this period on average across the OECD (especially since 2010) due to declines in revenues from excise taxes on alcohol and tobacco. Although a full analysis of these revenue trends is beyond the scope of this chapter, the declines have coincided with significant changes in both the consumption and the taxation of tobacco and alcohol over this period.
According to (OECD, 2023[11]), the proportion of the population aged 15 and over that smokes daily has fallen sharply across the OECD on average, from 20.6% in 2011 to 15.9% in 2021, with 32 of the 37 countries for which data is available observing a decline. Meanwhile, average alcohol consumption in OECD countries fell from 8.9 litres per person in 2011 to 8.6 litres per person in 2021, declining in 23 countries over this period.
According to the biennial Consumption Tax Trends publication, which tracks excise rates on various tobacco and alcohol products, there has been an upwards trend in excise tax rates across the OECD since 2000.6 However, these rates are expressed in units of currency, meaning that inflation may have eroded the real value of excise duties and caused them to fall as a proportion of GDP in some countries. As with other taxes, indexing health excises is an important means of ensuring their effectiveness as a mechanism for both generating revenues and reducing consumption (OECD, 2024[12]).
Revenues from tobacco taxes, which is the largest source of revenues from health taxes among the three categories across the time period, declined from 0.57% of GDP in 2000 to 0.47% in 2022. Revenues from tobacco excises demonstrate the greatest degree of volatility over this period, with a notable increase in revenues from 2007 to 2011 declining in most years from 2012 onwards. The aforementioned trend for higher excise rates was particularly pronounced for tobacco products; for example, the excise rate on cigarettes doubled in nominal terms between 2012 and 2022 in all but three of the 30 countries for which data for 2012 is available, and it increased by more than 200% in ten countries.
On average across OECD countries, the largest decline (in relative and absolute terms) across the three excise types occurred in revenues from excises on alcohol, which declined steadily from 0.40% of GDP in 2000 to 0.26% in 2022. Revenues from SSBs have been stable as a share of GDP (at around 0.05%) during the period under analysis despite the gradual expansion of SSBs over time.
Figure 2.3 shows the changes in health tax revenues between 2000 and 2022 as a share of GDP by OECD country. Panel A shows changes in combined health tax revenues across individual countries while Panels B, C and D show changes in each of the three health taxes under consideration over this period. For each Figure, countries are ranked according to the level of revenues in 2022 in descending order, left to right.
Percentage of GDP
Note: Tax revenue from excise taxes levied on tobacco, alcohol and SSBs (category 5121) are included for all reporting countries and years. The OECD average is computed using countries reporting positive excise taxes. See Table 2.A.1 for a list of reporting countries in 2000, 2010 and 2022.
Source: Authors’ calculations based on data provided to OECD Revenue Statistics 2024 for all countries and years.
Combined health tax revenues fell between 2000 and 2022 as a share of GDP in all but five countries: Czechia, Slovenia, Mexico, Switzerland and Costa Rica. In Czechia and Slovenia, the increases (of 0.01 p.p. and 0.21 p.p., respectively) were due to an increase in excise revenues from tobacco. Switzerland observed increases in revenues from tobacco and alcohol excises (of 0.26 p.p. and 0.05 p.p., respectively) while revenues from tobacco and SSBs increased slightly in Costa Rica. In Mexico, revenues increased as a share of GDP in all three categories (it introduced excises on SSBs in 2014).
Declines of 0.5% of GDP or more in health tax revenues as a percentage of GDP occurred in Ireland (1.29 p.p.), Luxembourg (0.75 p.p.), Norway (0.70 p.p.) and Denmark (0.51 p.p.). In Ireland, excise revenues from both tobacco and alcohol declined by 0.73 p.p. and 0.56 p.p. respectively. In Norway, there was a 0.33 p.p. decline in revenues from tobacco excises, a 0.30 p.p. decline in excises in alcohol and a 0.07 p.p. decline in revenues from excises on SSBs, while in Denmark revenues from tobacco excises declined by 0.31 p.p. and from excises on alcohol by 0.20 p.p. The decline in Luxembourg was largely due to a 0.73 p.p. decline in revenues from excises on tobacco between 2000 and 2022.
Across the three categories, 31 countries observed a decline in revenues from excises on alcohol as a share of GDP between 2000 and 2022, while 22 observed a decline in revenues from excises on tobacco. Of the eleven countries that reported revenues from excise taxes on SSBs in 2022 to OECD Revenue Statistics for this edition of the report, only two countries (Belgium and Netherlands) reported a decline in revenues from this category between 2000 and 2022. Relatively large increases in revenues from SSBs as a share of GDP were observed in Mexico and Costa Rica (due to the implementation of excises on SSBs), although even in these countries the level is low relative to revenues from excises on alcohol and tobacco. Revenues from excises on SSBs declined sharply in Norway because the SSB excise tax was repealed in 2021.
Percentage of GDP
Note: Health excise tax revenue is the sum of reported tax revenue collected from excise taxes levied on tobacco, alcohol and SSBs. The estimates of total health excise tax revenue raised are based on data reported by the countries (see Table 2.A.1 in the annex for a list of reporting countries). The OECD average is based on 37 OECD countries reporting at least one health excise tax revenue in 2000 (excluding Türkiye due an absence of data). Health excise tax revenue data are sourced from OECD Revenue Statistics (category 5121) for the 37 OECD countries displayed.
Source: Authors’ calculations based on data provided to OECD Revenue Statistics 2024 for all countries and years.
Health taxes have emerged as a potentially valuable tool for policymakers in public finance and health alike thanks to their capacity to generate revenues and improve health outcomes in OECD. This chapter shows revenues from health taxes (exclusively those levied through excises) on alcohol and tobacco products as well as SSBs across the OECD between 2000 and 2022 based on data provided by OECD countries for Revenue Statistics OECD 2024.
The chapter provides data on revenues from health excise taxes in OECD countries that is unique in terms of its granularity, comprehensiveness and comparability. Detailed and comparable data on revenues from health taxes is important to understand their impact and effectiveness as well as to enhance the design of these instruments. However, this data needs to be interpreted with caution due to the range and complexity of factors that may explain changes and trends in health tax revenues, as well as differences in the level of revenues from health taxes across countries.
As shown in this chapter, revenues from health excise taxes equate to a relatively small proportion of GDP and account for a relatively small share of total tax revenues. On average across OECD countries, health excise taxes amounted to 0.74% of GDP and generated 2.24% of total tax revenues in 2022. Taxes on tobacco generated the largest amount of revenues out of the three categories on average across the OECD, followed by taxes on alcohol. Excise taxes on SSBs remain relatively small.
Revenues from tobacco and alcohol have declined as a share of GDP in almost all OECD countries since 2000, resulting in a steady overall decline in total revenues from health taxes as a share of GDP on average. Over this period, consumption of alcohol and tobacco has declined on average across OECD countries while (nominal) excise rates have trended upwards. Revenues from taxes on SSBs have remained at a very similar level across this timeframe, although this data does not capture all the SSBs implemented in OECD countries due to reporting issues.
Revenue Statistics will continue to work with OECD countries (and some non-OECD countries) to enhance the granularity and comprehensiveness of data on revenues from health taxes as a basis for enhancements in policy making and cross-country analysis. In time, data on excise revenues could be complemented by information on revenues from customs duties on alcohol, tobacco and SSBs, which also generate revenues for the government and influence consumption.
References
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Notes: This table provides an overview on the reporting of health excise tax revenue by country for the years 2000, 2010 and 2022. All data is reported in OECD Revenue Statistics (category 5121), except for data for Türkiye prior to 2018, which is sourced from the national government’s “General Budget” annual publications starting in 2009 that provide identical data as in Revenue Statistics for the overlapping years. The following OECD countries currently have a SSB excise tax in place but do not report a separate SSB excise tax revenue category in OECD Revenue Statistics (and are therefore not included in this Special Feature): Canada (sub-national), Hungary, Poland, Spain (sub-national), United States of America (sub-national).
1 A special case applies to Chile, as it levies an indirect tax on alcohol and SSBs, respectively, classified as “Tasas especiales del impuesto al valor agregado” (or “VAT special rates”) under official tax revenue reports; hence, revenue raised from this tax are not classified under the “5121-Excise” category in OECD Revenue Statistics and thus not included in the displayed figures.
2 Korea levies a “special consumption tax on tobacco excise” but due to a lack of disaggregation, it is not included in the figures displayed.
3 Norway reports SSB excise tax revenue OECD Revenue Statistics until 2021 as the tax was repealed in that year.
Source: OECD Revenue Statistics 2024
Percentage of GDP
Note: Health excise tax revenue (Panel A) is the sum of reported tax revenue collected from excise taxes levied on tobacco (Panel B), alcohol (Panel C) and SSBs (Panel D). The estimates of health excise tax revenues are based on data reported by the countries. The OECD average for health excise tax revenues is calculated based on 38 countries for total health excise tax revenue, 38 countries for tobacco, 37 countries for alcohol and 12 countries for SSB (Annex Table 2.A.1. provides a list of reporting countries). Health excise tax revenue data are sourced from OECD Revenue Statistics (category 5121) for all OECD countries in 2022.
Source: Authors’ calculations based on OECD Revenue Statistics 2024.
Percentage of total tax revenues
Note: Health excise tax revenue (Panel A) is the sum of reported tax revenue collected from excise taxes levied on tobacco (Panel B), alcohol (Panel C) and SSBs (Panel D). The estimates of health excise tax revenues are based on data reported by the countries. The OECD average for health excise tax revenues is calculated based on 38 countries for total health excise tax revenue, 38 countries for tobacco, 37 countries for alcohol and 12 countries for SSBs (Annex Table 2.A.1. provides a list of reporting countries). Health excise tax revenue data are sourced from OECD Revenue Statistics (category 5121) for all OECD countries in 2022.
Source: Authors’ calculations based on OECD Revenue Statistics 2024.
← 1. The definition could reasonably be extended to include (for example) products that damage the environment, given the impact of pollution on people’s health.
← 2. For the purposes of this study, the definition of SSBs follows that of the World Health Organisation: ‘[A]ll types of beverages containing free sugars, and these include carbonated or non-carbonated beverages, fruit/vegetable juices and drinks, liquid and powder concentrates, flavoured water, energy and sports drinks, ready-to-drink tea, ready-to-drink coffee and flavoured milk drinks.’ (World Health Organization, 2023[17]) However, it should be noted that products taxed as SSBs in OECD countries may use artificial sweeteners rather than sugar. For the purposes of this chapter, such products are still counted as SSBs, even though the title is not strictly accurate.
← 3. In addition to the 12 countries discussed in this chapter, the following countries implement taxes on SSBs but do not report a separate SSB excise tax revenue category to OECD Revenue Statistics and are therefore not included in this Special Feature: Canada (at sub-national level), Hungary, Poland, Spain (sub-national) and United States (sub-national). Norway is one of the countries for which revenues on SSBs are included in the chapter but data is not shown for 2022 as its SSB excise tax was abolished in 2021.
← 4. Please consult Chapter 3 of (OECD, 2022[3]) for a broader exploration of this topic.
← 5. According to (Goodchild, Nargis and Tursan d’Espaignet, 2018[15]), the economic costs of smoking-attributable diseases was equivalent to 2.2% of GDP on average across high-income countries in 2012.
← 6. Please refer to (OECD, 2022[3]) and previous editions of the same report for data on excise rates for (inter alia) cigarettes, cigars, rolling tobacco for cigarettes, beer, still wine, sparkling wine and other alcoholic beverages.