Taxes and other fiscal measures on health-related commodities are in widespread use. Alcoholic beverages and tobacco products have been subjected to taxation for a long time in most countries. Several OECD governments have passed legislation to increase existing taxes or to introduce new taxes on foods high in salt, sugar or fat in the past few years. Traditionally, commodity taxes have been primarily seen as a source of fiscal revenues and a way to address consumption externalities. More recently, an increased emphasis has been placed on the potential health benefits of commodity taxation, as evidence emerged of the adverse public health, social and economic consequences of the consumption of a range of commodities.

This paper provides a review of the theoretical arguments and empirical evidence on the key factors that governments must address when considering the adoption of fiscal measures for health promotion, highlighting the strengths, as well as the limitations and pitfalls, of specific measures. The main focus of this paper is on taxes on health-related commodities, although a range of other fiscal measures may potentially be used in health promotion.

Existing evidence of effects on consumption and health outcomes points to the conclusion that taxes on healthrelated commodities can be a powerful tool for health promotion, although the variety and complexity of the effects they generate require careful consideration by policy makers who intend to adopt new taxes or reform existing ones. The arguments in support of taxes being used to attain public health objectives are strong for tobacco products and alcoholic beverages, but less clear-cut for foods, in which case the value of using taxes is highly dependent on their design and on the context in which they would be applied.