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New evidence: tax financing for UHC by Aaron Reeves, Senior Research Fellow, University of Oxford

The Ebola crisis exposed the weaknesses of healthcare systems in low- and middle-income countries created mainly by insufficient funding. Given the global community’s commitment to universal health coverage (UHC), the Ebola outbreak has prompted serious reflection among health policy decision-makers. One of the central features of this debate is financing: how can relatively poor countries find the money to pay for universal health coverage? To date, low- and middle-income countries have been growing toward UHC through social health insurance systems funded through employment. Yet, progress has been slow and uneven leaving people in the informal sector, who are the majority of the population, out was insurance schemes. Rather than seeking innovative solutions to this old problem, what is needed is a renewed commitment to an old solution: tax-based financing.

Taxation has sometimes been overlooked in debates around financing UHC. The Lancet’s recent Global Health 2035 commission only discussed taxation in the context of specific consumption taxes on risky behaviours, such as tobacco and alcohol. These so-called “sin taxes” are important public health measures but they are unlikely to generate sufficient revenue to finance UHC. Instead, low- and middle-income countries should look to translate economic growth into healthcare spending through general taxation.

Using data from low- and middle-income countries my colleagues and I examined the association between tax revenues and health spending. We found that tax revenue was a major statistical determinant of progress towards UHC. Each $10 per-capita increase in tax revenue was associated with an additional $1 of public health spending per capita. Whereas each $10 increase in GDP per capita was associated with an increase of $0.10. Crucially, tax revenues sit on the pathway between economic growth and health spending. In short, tax financing is an efficient way of translating economic growth into health spending.

Countries with more tax revenues have also made more progress on other indicators of UHC, even after adjusting for economic activity in the country. Among tax poor countries, greater tax revenues are associated with more women being attended by a skilled healthcare worker during pregnancy and greater access to healthcare for all people.

How taxes are collected is also important.  Governments can choose how they collect tax revenues. The IMF and World Bank traditionally split these modes of taxation into three types: 1) Taxes on income, profits, and capital gains, which tend to be progressive because the poor pay a smaller proportion of their income; 2) Taxes on goods and services, which tend to be regressive because the poor pay a larger share of their income; and 3) Other taxes, such as property taxes. In recent years, low- and middle-income countries have tended to rely more heavily on taxes on goods and services because they are easier to collect. However, they can also increase the cost of staple foods and healthcare, unless these specific goods and services are exempt from such taxation. Because taxes on goods and services can increase the cost of food and healthcare they may also reduce access to these necessities among economically deprived households and communities.

With the same tax data described above, we examined whether changes in taxation within a country over time was associated with changes in infant mortality. The results were clear. Where taxes on goods and services increase (thereby increasing the cost of food and healthcare) infant mortality also increased.  However, where taxes on income, profits, and capital gains increase (progressive taxation) we do not find this same relationship.

Expanding the tax base in low- and middle-income countries can be difficult, especially if governments are going to rely on income, profits, and capital gains. This is because there is a very large informal economy in many of these countries, tax revenues from income can be unstable. Yet, the UK government has shown how some countries can increase revenues through reducing corporate tax evasion. Under the direction of DFID, tax accountants worked with two developing countries (Ethiopia and Tanzania) to reduce tax evasion, increasing tax revenues by 40% in 3 years. This type of intervention is especially important because before the Ebola outbreak in Sierra Leone, only one in five leading mining companies had paid any corporate income tax. If they had been adopted sooner, such interventions could have strengthened the health systems in Sierra Leona and other Ebola-hit countries.

Tax is not sexy. Tax is not necessarily innovative. But, tax is the cornerstone on which we can achieve UHC.

This post is based on: Reeves A., Gourtsoyannis Y., Basu S., McCoy D., McKee M., Stuckler D., 2015, Financing universal health coverage: effects of alternative tax structures on public health systems in 89 low- and middle-income countries. The Lancet,




Lessons Learnt from a project on Universal Health Coverage in Egypt, Ghana and India by Monica Mutesa, Southern advocacy advisor, Oxfam

Significant advances towards Universal Health Coverage (UHC) in a number of low and middle income countries have fostered an enthusiasm for UHC amongst governments and civil society organisations (CSOs). This is a welcome shift yet the progress remains fragile. An Oxfam programme delivered in Ghana, India and Egypt with funding from the Rockefeller Foundation has highlighted a number of lessons on how to increase demand for UHC and help governments make concrete steps towards achieving it.

Examples of programme activities

The CSOs participating in the project have engaged in national level policies on health with specific focus on UHC. They acted as conveners for stakeholders and provided platforms at key moments such as the national budget and policy processes. Blogs[1] and policy briefs were used to promote UHC as a national priority.

Oxfam provided technical support to the CSOs via organising webinars on topics such as financing UHC, sharing experiences of Ghana and India’s insurance systems and via sharing advocacy tools as well as mentoring in project planning. Platforms were created for linking and learning, technical backstopping and training and an online archive of products and materials for future advocacy work by partners and Oxfam staff was established.

UHC public awareness was increased through activities such as mobile clinics and a discussion camp in Egypt, marches in Ghana and translation of a UHC cartoon to a local language in India.

To crown it all, partners participated in the first UHC day (12 December 2014). In India, Oxfam collaborated with the World Health Organisation, Public Health Foundation of India and the Rockefeller Foundation to commemorate the UHC day. The celebrations included a panel discussion on “UHC in India: Opportunities and Challenges” and sharing Oxfam India’s draft discussion paper, “Financing Healthcare for all in India: Towards a Common Goal”.

Lessons learnt

The CSOs participating in the project identified the following learning lessons:

  • Early and sustained engagement with key government offices both at national and local levels and gaining their support was critical.
  • The creation of platforms for communities as end users of services to engage with government officials e.g. through a camp at a village in Egypt gave an insight into how the policy formulation process can be inclusive of people’s views and experiences.
  • Working with retired health professionals (in Ghana) and private practitioners (in India) in advocacy efforts was beneficial as these professionals are respected and their voices carry weight and credibility.
  • The wide use of social media including moderated Facebook pages is essential to the success of popularising the concepts and values of UHC particularly when social media is increasing in popularity.
  • Linking UHC as an approach that ensures quality health care for all who need it, to the situation of the health system that people face every day in terms of unmet health needs was important in demonstrating the value of UHC.
  • The platforms for sharing experiences such as the webinars and teleconferences proved to be useful learning ‘tools’ for CSOs to learn different ways of promoting UHC.


Low level of awareness and understanding of UHC and the post 2015 development framework consultations among the legislature, executive, the media and the civil society was a challenge. The project aimed to address this challenge via its activities in different country contexts and via the use of global resources such as informative briefing papers. In Ghana, discussions were held with the Ministry of Health on the need to build the capacity of parliament on UHC and the post 2015 development framework consultation and process. Over the longer term, the Ghana UHC campaign is hoping to build the capacity of Ghanaian civil society on UHC. In Egypt, CSOs used both traditional and social media as well as direct contact with communities to raise awareness.

Influencing governments on UHC financing is a major challenge because of the low level of public funding of health services and the rising trend towards privatisation of healthcare. Advocating for a pro-poor strong public health system has been a difficult task. In order to address this challenge, the use of research evidence such as those published by Oxfam and others has given credibility to support for public financing. The web portal on the social regulation of private sector was developed in India, which provides information and invites citizens to share their experiences of seeking care at private health facilities..

The limited time for the project (only one year), while providing a base for CSOs activities, did not allow the organisations sufficient time to develop the work to a level where real impact can be seen. With the current focus on long-term planning and financing of UHC, it is important that donors also extend funding for NGOs the necessary time to achieve tangible results.

In conclusion

This project  has formed a firm foundation on which further work on UHC can be built. The lessons learnt from the project can be used to inform and improve the outcomes of similar projects.



Global Health Check was created by Anna Marriott and is currently edited by Mohga Kamal-Yanni