The Framework Convention Alliance for Tobacco Control

Palau tobacco tax to fight NCDs

Palau has become a world leader in using tobacco tax revenue to finance the fight against non-communicable diseases (NCDs)*.

On 17 Feb 2016, Palau President Tommy E. Remengesau Jr. signed a law that sets aside 10 percent of revenues raised annually from alcohol and tobacco taxes to finance NCDs prevention, through the country’s National Coordinating Mechanism.

Implementation of the WHO Framework Convention on Tobacco Control (FCTC) is a key part of NCDs prevention in the tiny Pacific Island country.

Palau might be the first country in the world to channel such taxes to an NCD mechanism. Other countries dedicate tobacco taxes to various health care needs.

Thailand: health promotion

For example, since 2001 Thailand has levied a two-percent tax on tobacco and alcohol to fund health promotion. About one-third of that money is used to address the four main risk factors for NCDs: tobacco use, overconsumption of alcohol, lack of physical activity and unhealthy diets.

Gabon, in West Africa, uses revenue generated by a dedicated tax to finance tobacco control initiatives and to fight NCDs.

Palau’s new law also earmarks 10 percent of alcohol tax revenue and 10 percent of tobacco tax revenue to pay health care coverage subscription costs for non-working elderly and disabled citizens.

*NCDs cause nearly 2/3 of global deaths, and it is estimated that they will cost the world economy US$30 trillion by 2031. Tobacco use is the one risk factor common to four major NCDs: cancers, cardiovascular and lung disease, and diabetes. NCDs already cause 78 percent of deaths in Palau, and indications are that NCD-related mortality and morbidity are rising.

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