Political Economy Analysis of Health Taxes (Tobacco, Alcohol Drink, and Sugar Sweteened Beverage): Case Study of Three Provinces in Indonesia

Abstract

Efforts to implement health tax policies to control the consumption of harmful commodities and enhance public health outcomes have garnered substantial recognition globally. However, their successful adoption remains a complex endeavour. This study takes a problem-driven political economy analysis (PEA) approach to investigate the challenges and opportunities surrounding health tax implementation, with a particular focus on sub-national government in Indonesia, where the decentralization context of health tax remains understudied. Employing a qualitative methodology by collecting data from a total of twelve focus group discussions (FGDs) conducted in three provinces—Lampung, Special Region of/Daerah Istimewa (DI) Yogyakarta, and Bali, each chosen to represent a specific commodity: tobacco, sugar-sweetened beverages (SSBs), and alcoholic beverages—we explore the multifaceted dynamics of health tax policies. These FGDs involved 117 participants, representing governmental institutions, non-governmental organizations (NGOs), and consumers. Our findings reveal that while health tax policies have the potential to contribute significantly to public health, challenges such as a lack of consumer awareness, bureaucratic complexities, and decentralized governance hinder implementation. Furthermore, this study underscores the importance of effective policy communication. It highlights the importance of earmarking health tax revenues for public health initiatives. It also reinforces the need to see health taxes as one intervention as part of a comprehensive public health approach including complementary non-fiscal measures like advertising restrictions and standardized packaging. Addressing these challenges is critical for realizing the full potential of health tax policies.