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Spain opts to fuel health funds with petrol sales

Xavier Bosch Barcelona

The Spanish government voted last week for an extra tax on petrol to finance the state health service. Germany, Austria, and Italy already have a similar tax in place.

The tax, due to come into effect on 1 January 2002, will mean that 4 pesetas (1 p; 2 cents) per litre of petrol or diesel will be collected by the government to put into health funds. Regional communities with responsibilities for healthcare provision will be able to apply a variable tax up to a further 4 pesetas until 2004, which can also be devoted to environmental projects. The new tax will raise 136 billion pesetas (£500m; $720m) a year, said Estanislao Rodríguez-Ponga, state secretary at the treasury.

Spain’s health system is an integrated state health service with decentralised management. Power is being progressively devolved to the country’s 17 autonomous communities, with seven areas already having full responsibilities for health care. These include the Basque country, Andalucia, and Catalonia and cover around 60% of the population. In the remaining 10 communities, overall responsibility for health services still rests with the Instituto de la Salud (Insalud), which manages a network of public health services. Insalud, based in Spain's health ministry, will be dissolved once the process of transferring power to the regions is complete.

The health minister, Celia Villalobos, told Spain’s parliament that for the country’s health system to remain one of world’s best (according to the World Health Organization), it will need more funds. "Our system relies on taxes paid by Spaniards, including future petrol taxes," she said, adding that the Spanish healthcare system is free at the point of delivery thanks to taxes provided by citizens.

Although backed by the eight regional communities run by the ruling Partido Popular party and Catalonia, the new tax was opposed by the socialist party. The socialists would prefer any dedicated health taxes to come from activities having a direct negative impact on health, such as alcohol and tobacco. This approach is also being discussed by the European Union.

But Cristóbal Montoro, finance minister, who chaired the meeting of the Council of Financial and Fiscal Policy that voted for the new tax, said that the government also intends to increase alcohol taxes by up to 8% next year to help fund the health system. He said that the higher the alcohol strength of the drink, the higher the tax would be.
 
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