Health financing for universal coverage

Tax-based financing for health systems: options and experiences

Discussion paper, Number 4/2004

World Health Organization

Publication details

Number of pages: 22
Publication date: 2004
Languages: English
WHO reference number: EIP/FER/DP.04.4



This paper discusses the use of tax revenues as the predominant source of health care financing. It defines "Tax-Based Systems" as those in which more than half of public expenditure is financed through revenues other than earmarked payroll taxes (i.e. to distinguish it from social security or social health insurance), and in which access to publicly-financed services is, at least formally, open to all citizens.

Consequently, this paper complements a series of studies produced by WHO on other forms of health care financing, including social insurance (G. Carrin, C. James 2003), private health insurance (N. Sekhri, W. D. Savedoff 2003), community health insurance (G. Carrin 2002) and user fees (A. Singh 2003).

It presents an overview of the main forms of taxation that fall within this rubric, along with advantages and disadvantages. It then discusses the main issues involved in management and use of tax revenues for health care services. It proceeds to illustrate these issues through the experience of several countries with general tax-based health systems. The paper then concludes with the main messages distilled from this review.