Health experts and industry players are pushing for Kenya to link revenues from health taxes, commonly known as sin taxes, to specific health outcomes and referral hospitals financing.
The say channeling part of the collections directly to major public health institutions to strengthen financing for Universal Health Coverage (UHC) can help in easing the cost burden.
The proposal comes amid growing concern over the rising cost of treating tobacco-related illnesses and questions over whether the billions of shillings collected through excise taxes on harmful products are sufficiently supporting prevention, treatment and other public health interventions.
Participants at a tax and public health forum argued that health taxes should be viewed not only as a revenue collection tool but also as a mechanism for reducing disease, financing prevention programmes and easing the pressure on the country's healthcare system.
They proposed that part of the revenue collected from tobacco, nicotine and other harmful products be tied to measurable health outcomes, including smoking cessation, disease prevention, cancer treatment and youth-focused interventions.
The discussion comes as evidence presented at the forum showed that Kenya continues to face a significant gap between the taxes imposed on tobacco products and the health and economic burden associated with their consumption. Participants said tobacco-related illnesses alone cost the country tens of billions of shillings annually, strengthening the case for using health taxes to directly support the health sector.
Tax Justice Network Africa, Policy Associate for Tax and Equity John Njenga, said taxation should ensure that manufacturers of harmful products contribute more towards addressing the health consequences associated with their products.
He said resources collected from health taxes could be channelled towards prevention and cessation programmes, particularly among young people who are increasingly being exposed to emerging nicotine products such as e-cigarettes and nicotine pouches.
“We need taxation regimes that actually protect them from use, but also ensure that whatever resources are collected from taxation goes into supporting cessation programmes and prevention programmes,” he said.
Participants also called for funds collected from health taxes to support large health institutions dealing with expensive illnesses such as cancer, arguing that earmarking part of the revenue could create a more predictable source of financing for specialised treatment.
The proposal could add momentum to the broader debate on sustainable financing for UHC, which requires Kenya to expand domestic resource mobilisation while managing rising healthcare costs.
Kenya Institute for Public Policy Research and Analysis (KIPPRA), policy analyst Christopher Mutwiri said tobacco taxation presents a “win-win” policy because higher prices can discourage consumption while generating additional revenue for government.
Research presented at the forum showed that a 10 per cent increase in tobacco prices can reduce consumption by between 4 and 8 per cent, demonstrating the potential of taxation as both a public health and fiscal policy tool.
Mutwiri said policymakers should increasingly view health taxes as disease prevention instruments rather than simply revenue-generating measures.
“We should think of taxing tobacco so that we can be able to finance our health as a country,” he said, adding that some of the money could also support health infrastructure and research.
The renewed push comes as health experts call for Kenya to further raise tobacco taxes towards the World Health Organization's recommended threshold of 75 percent of the retail price.
National Taxpayers Association CEO Patrick Nyangweso, said taxes currently account for roughly a third of the retail price of cigarettes, leaving room for further adjustments.
They also want emerging nicotine products brought more firmly into the country's tax and regulatory framework as manufacturers continue introducing alternatives to traditional cigarettes.
However, higher taxation presents enforcement challenges, particularly through smuggling and illicit trade. Kenya Revenue Authority officials said enforcement becomes more difficult further down the supply chain, while products without the required tax stamps continue to find their way onto retail shelves.
KRA manager in the domestic excise sector Josephine Muraya, said stronger enforcement would need to be complemented by greater consumer awareness and cooperation across government agencies.
The debate is also extending beyond Kenya's borders, with policymakers pushing for harmonisation of excise taxes across the East African Community to reduce tax arbitrage and limit opportunities for smugglers to exploit differences in national tax rates.
For health experts, however, the central question is increasingly becoming what happens after the tax is collected.
NTA Communications Associate Danielle Onyango said linking health taxes to clearly defined outcomes or directing part of the revenue to major public health institutions would create a clearer connection between the harm caused by tobacco and other harmful products and the resources available to prevent and treat disease.
