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Work Package # 5Regulation and taxation

Improving coherence in fiscal policies

Summary

Task 5.2 aims to bolster fiscal policy coherence, consisting of two sub-tasks. The first focuses on reviewing and improving health taxation strategies, while the second evaluates excise taxes on alcohol and tobacco for better market harmonization and public health outcomes. Collectively, these sub-tasks strive to refine fiscal measures that can effectively contribute to NCD prevention.

Health taxation

A leading research group on health economics and policy innovation will be sub-contracted to provide new evidence on five areas of taxation that may provide major opportunities for health improvement, including: tobacco, alcohol, food, non-alcoholic beverages and environmental taxes.  

The work will entail:

  1. A review of current EU taxation directives and national taxation policies;
  2. The identification of strengths, weaknesses and best practices based on prior evaluations of the impacts of those directives and policies;
  3. The creation of a data and modelling infrastructure to support EU and country efforts in the design and implementation of new fiscal policies; and,
  4. The simulation of tax policy developments in the five areas listed above, based on the Health-GPS policy microsimulation model. Special attention in this work will be paid to how vulnerable groups are affected by, and benefit from, health taxes. The assessment of tax policy scenarios will address key equity dimensions, including fiscal justice, socioeconomic and health inequalities.  

Alcohol and tobacco excise taxes as an NCD policy instrument and the role of cross-border trade

The aim with the sub-tasks is to gather and analyze the evidence on excise taxes to promote price harmonization of alcohol and tobacco products in the internal market and to inform on the relation between excise taxes, prevalence and cross-border trade in identified “heat zones”. 

The actions within the sub-task are to:

  1. Summarize of selected country cases – current excise taxes, prices and key measures of alcohol and tobacco use; and how changes in excise tax/price affected prevalence, tax revenues, and leakages through increased cross-border shopping and transition to substitute products;
  2. Map and analyze available knowledge about cross-border shopping of alcohol and tobacco by private individuals. This includes reviewing new monitoring tools for cross-border trade and exploring lockdown effects on such trade during the recent pandemic. Focus will be on identified “heat zones” like Finland/Estonia, Denmark/Germany, Norway/Sweden etc.
  3. Project how increasing alcohol and tobacco excises would change key measures of alcohol and tobacco use, excise tax incomes, taking leakages to cross-border shopping and substitution into account.