Reform commission proposes health tax on luxury hotels, restaurants, malls, and clubs
The commission emphasised the need to allocate at least 5% of GDP and around 15% of the national budget to healthcare
Highlights:
- Health tax to target luxury hotels, restaurants, malls, and clubs
- Tax structure must avoid burdening low-income groups
- Calls for allocating 5% of GDP and 15% of the budget to health
- Bond funds to support hospitals, digital health, and emergency care
- Commission urges joint oversight by health and finance ministries with diaspora outreach
- It suggests introducing a national social health insurance scheme
The Health Sector Reform Commission has recommended a dedicated health tax on luxury and non-essential goods and services, and introducing a social health insurance scheme to ensure more equitable healthcare access.
Alongside this initiative, the commission has proposed launching a Health Development Expatriate Bond to enable direct investment from expatriate Bangladeshis in the country's healthcare system.
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In its report submitted to Chief Adviser Muhammad Yunus today (5 May), the reform commission outlined 37 proposals aimed at reforming the health sector, with a focus on improving accessibility, affordability, and financial sustainability.
According to the report, the proposed heath tax would target establishments and products considered non-essential and high-end, such as air-conditioned restaurants, upscale hotels, luxury shopping malls, multiplex cinemas, amusement parks, high-end electronics, luxury spas, and elite private clubs.
The commission stressed that the tax must be structured in a way that does not impose any burden on lower-income populations.
Among the key proposals, the commission emphasised the need to allocate at least 5% of GDP and around 15% of the national budget to healthcare.
The commission argued this would expand access to services, reduce the burden of out-of-pocket expenses, and enhance financial protection for citizens.
According to the report, the proposed Health Development Expatriate Bond would be a government-guaranteed instrument offering competitive interest rates, tax benefits, and flexible foreign exchange options to investors.
Health sector reform commission recommends free primary healthcare, separate medical service cadre
The funds raised would support improvements in primary healthcare infrastructure, the modernisation of government hospitals, expansion of digital health solutions, emergency preparedness, and the implementation of social health insurance.
To ensure effective governance, the commission has recommended establishing a transparent and efficient joint administrative structure involving both the Ministry of Health and Family Welfare and the Ministry of Finance.
Additionally, a global campaign is proposed through embassies, consulates, and digital platforms to engage the Bangladeshi diaspora. The campaign would emphasize how their contributions directly support public health improvements and uplift the quality of life across the country.
The report cites international examples of successful diaspora bonds, noting that India has raised $11 billion through such instruments for infrastructure and health initiatives. Ethiopia has also leveraged diaspora bonds to finance projects in the energy and railway sectors.
