Ethiopia Takes Bold Strides on Health Taxes to Drive Universal Health Coverage

Legislative Leadership and Multisectoral Collaboration

Ethiopia’s commitment to health taxes is anchored in strong political will and a collaborative approach that brings together legislative bodies, government ministries, and international organizations. The Ethiopian House of Peoples’ Representatives (HPR) and the Ministry of Health have been at the forefront of this effort, working closely with the World Health Organization (WHO), the Inter-Parliamentary Union (IPU), and financial supporters such as the Government of Norway.

A high-level training workshop held in June 2025 in Adama, Ethiopia, exemplified this multisectoral cooperation. The event convened 63 members of parliament, parliamentary staff, and senior health officials to deepen their understanding of health taxes and their role in public health policy. This forum underscored the importance of legislative engagement in shaping economic policies that directly affect health outcomes.

The 2020 Excise Tax Law: A Turning Point for Public Health

Ethiopia’s 2020 excise tax legislation marked a significant milestone by imposing taxes on tobacco, alcohol, and sugar-sweetened beverages. These products are known contributors to the rising burden of NCDs such as cardiovascular diseases, diabetes, and cancer. By increasing the cost of these harmful commodities, the law aims to reduce consumption, thereby lowering health risks like addiction and premature death.

Deputy Speaker Lomi Bedo highlighted the transformative potential of this legislation, emphasizing how raising prices on unhealthy products is one of the most effective strategies to promote healthier communities. This approach aligns with Ethiopia’s broader development vision and its commitment to achieving the Sustainable Development Goals (SDGs), particularly those related to health and well-being.

Addressing Challenges and Industry Opposition

Despite the clear public health benefits, the implementation of health taxes has faced challenges, including opposition from industries affected by the legislation. For instance, the tobacco sector has propagated misleading claims suggesting that over half of the tobacco market has shifted to illicit trade following the tax increase.

Ethiopian State Minister of Health Dr. Dereje Duguma stressed the importance of relying on evidence-based policymaking to counter such narratives. He reiterated the Ministry’s commitment to working with Parliament, WHO, and other partners to enhance tax administration and safeguard the progress made in controlling NCDs and advancing UHC.

Technical Support and Capacity Building for Sustainable Implementation

The success of health taxes depends not only on legislation but also on effective implementation and ongoing policy support. WHO’s involvement through a multi-year project, funded by the Norwegian Government and in collaboration with IPU, provides Ethiopia with targeted technical assistance. This includes policy analysis, tax implementation strategies, and improved access to NCD treatment and care.

During the Adama workshop, participants engaged with updated policy briefs, data, and technical tools designed to inform legislative decisions and ensure the sustainability of health tax policies. Discussions highlighted the critical role of Parliament in maintaining robust tax systems, supporting regular tax adjustments, and protecting policymaking from industry interference.

Health Taxes as a Global Strategy Against Noncommunicable Diseases

Health taxes have gained international recognition as an effective measure to reduce the prevalence of NCDs, which account for more than 70% of global deaths and disproportionately affect low- and middle-income countries. By discouraging the consumption of harmful products and generating revenue for health services, these taxes serve a dual purpose.

Ethiopia’s approach demonstrates how strategic legislation, grounded in scientific evidence and supported by policy and partnerships, can contribute to both public health and economic resilience. The country’s experience offers valuable lessons for other nations seeking to strengthen health financing and reduce the burden of chronic diseases.

Future Directions and the Path Toward Universal Health Coverage

Looking ahead, WHO Ethiopia has committed to continued collaboration with the Ethiopian Parliament, Ministry of Health, Ministry of Finance, and other stakeholders to enhance the health financing landscape. Ensuring that health taxes are effectively implemented and that the additional revenues are managed with accountability is essential for achieving the intended health outcomes.

Dr. Owen Laws Kaluwa, WHO Representative to Ethiopia, underscored that health taxes are not merely revenue tools but vital measures that save lives and preserve health. Ethiopia’s leadership in this domain provides a blueprint for the region and beyond, illustrating how fiscal policies can be leveraged to build stronger health systems and promote equitable access to care.

What this means

Ethiopia’s bold steps in adopting and implementing health taxes illustrate the powerful role that fiscal policies can play in advancing public health and economic resilience. By increasing excise taxes on tobacco, alcohol, and sugar-sweetened beverages, the country is actively curbing the rise of noncommunicable diseases while securing additional resources to fund essential health services. This initiative, supported by strong legislative leadership, multisectoral collaboration, and international partnerships, provides a valuable example for other nations striving to achieve Universal Health Coverage. Moving forward, sustained political will, evidence-based policymaking, and accountable financial management will be essential to maximize the benefits of health taxes and ensure healthier futures for all Ethiopians.