Health Taxes: Stakeholders Seek Higher Rates for Cigarettes, Alcohol, other Harmful Products

By Ojoma Akor

Some stakeholders in Nigeria’s health sector have called for higher rates for cigarettes, alcohol, and other harmful products.

They also advocated for stronger health taxes, supported by effective laws and policies, to discourage consumption of harmful products and increase domestic funding for healthcare.

A statement from Development Governance International (DGI) Consult, signed by its Communication and Knowledge Management Specialist, Wole Alawode, said they made the call in Abuja during a national stakeholders’ inception workshop titled “Realizing Health Taxes for Sustainable Health Financing and Curbing Non-Communicable Diseases (NCDs) in Nigeria.”

The stakeholders noted that Nigeria faces a growing burden of non-communicable diseases (NCDs) alongside persistent challenges in financing health and protecting households from healthcare costs. They said health taxes on tobacco, alcohol and sugar-sweetened beverages offer an opportunity to address both challenges.

They further said that while Nigeria has introduced taxes on these products, gaps remain in tax rates and structures, implementation, enforcement, and the use of revenues for health.

The stakeholders highlighted health taxes as an opportunity to discourage harmful consumption while mobilizing additional domestic resources for health.

The project’s Principal Investigator and Director General (DG), National Health Insurance Authority (NHIA), Dr. Kelechi Ohiri, said significant work has gone into advancing health taxes in the country, adding that progress on sugar-sweetened beverage taxation is particularly encouraging.

Represented by Dr. Kurfi Abubakar, he highlighted that the project would build on existing evidence and policy efforts rather than duplicate previous work, while strengthening coordination and implementation to translate the progress already achieved into lasting policy and health financing results.

He described the HTTT as particularly important because no single institution can deliver meaningful health-tax reform on its own.

“This is not to duplicate or replicate existing efforts but to harmonize and work with them so that we can bring in additional evidence, ensure coordination and implementation in that direction so that we can move faster and translate the progress already achieved into lasting policy and health financing results. As seen in other exemplar countries, these taxes can help discourage consumption of harmful products, reduce pressure on the health system, and increase funds available for healthcare,” he said.

A representative of the Chairman of the Senate Committee on Health, Senator Ipalibo Banigo, applauded the dual role of health taxes in reducing consumption of products that contribute to preventable diseases while mobilizing additional domestic resources for health.

She highlighted recent legislative efforts, including amendments to the Customs and Excise Duty framework and the National Health Act aimed at increasing the Basic Health Care Provision Fund (BHCPF) allocation from 1% to 2% of the country’s consolidated revenue fund.

She said these efforts were part of a broader legislative commitment to improve the sustainability of health financing and called for effective implementation, transparency, accountability, evidence-based policy design, public awareness, and strong intersectoral collaboration to translate reforms into improved health outcomes.

The Senior Special Assistant to the President on Public Health, Mrs. Uju Rochas Anwukah, described health taxes as a means of “discouraging what is killing us and funding what can save us.”

She emphasized the need for domestic responses to the growing burden of NCDs.

Dr. Gafar Alawode, Chief Executive Officer of DGI Consult, said that the project builds on previous evidence and policy analysis on health taxes in Nigeria, published in a peer-reviewed journal and disseminated.

He said, “We look forward to strengthening existing policies and legal framework on health taxes. We want to ensure that the laws and policies are potent enough to curb consumption of these harmful products and at the same time to be able to realize more money for health, but more importantly to ensure that the money realized is invested in health system strengthening and health insurance.”

He added that the real work will be translating the strategy into implementation and measurable results.

Veteran Health Journalist and Chair/Co-convener of the Nigeria Universal Health Coverage Forum, Chief Mrs. Moji Makanjuola, said sourcing additional resources for health is vital, especially as donor funds shrink.

She said, “We have to look inward. How do we get domestic finances that can help sustain health care, and make health accessible with equity for everyone?”

She said that discouraging consumption of harmful products through effective health taxes is a collective effort across all segments of society.

She also emphasized the importance of public awareness and citizen demand in ensuring that health-tax reforms translate into effective implementation and improved access to health services.

The Chairman of the Health Sector Reform Coalition and former Director General of the NHIA, Dr. Mustapha Lecky, said health taxes are of significant interest to civil society organizations across Nigeria.

He outlined previous CSO engagements during public hearings on health taxation, where evidence was presented on available financing sources and approaches to strengthening health financing without necessarily relying on additional taxation.

He added that the coalition is willing to contribute more evidence and expertise to the reform process.

The workshop brought together policymakers, legislators, development partners, civil society, researchers, and other stakeholders. DGI Consult convened it in collaboration with the Health Strategy and Delivery Foundation (HSDF) and the NHIA, with support from the Alliance for Health Policy and Systems Research (AHPSR)