Raising domestic resources for health: Can tax revenue help fund Universal Health Coverage?
For countries that aspire to achieve the goal of Universal Health Coverage, the question of how to increase funding for health is of fundamental importance; external sources such as donor funding can be unstable and unsustainable, and insurance schemes often exclude the most poor and marginalised populations. Ensuring ‘health for all’ requires substantial increases in funding from domestic sources in a sustainable and equitable manner.
One way of increasing revenue is through improved tax collection and larger total government budgets. Recent evidence from South Africa, Kenya and Lagos State in Nigeria, shows that it is possible to increase tax revenue without raising tax rates. What has been more challenging however, is ensuring that this additional revenue is allocated to the health sector.
This brief outlines how the countries increased tax revenue and identifies common factors across contexts. It then uses the South African experience to explore whether the health sector benefited from additional tax revenue. The brief concludes with recommendations for health sector officials about how to negotiate more successfully for additional resources to be spent on health.