OBJECTIVES: Taxes on unhealthy consumer goods can internalise the costs of their consumption and, with the right tax rate, can change an individual's consumption patterns and health awareness. In 2011, Hungary introduced the Public Health Product Tax (PHPT), covering a wide range of products. Our aim is to assess PHPT’s tax base and tax income in Hungary.

METHODS: We conducted a quantitative, retrospective, descriptive study using data provided by the National Tax and Customs Administration of Hungary for the period 2011-2022, analysing the amount of tax income in HUF, as well as taxable amount measured in kilograms or litres. We analysed the magnitude and proportions of taxable product groups and the percentage change over the period assessed.

RESULTS: The total tax revenue of PHPT was HUF 19.49 billion in 2012, increasing to HUF 81.13 billion in 2022. Both the tax base and the tax revenue have shown a steady upward trend over the years. Prepacked sweetened products accounted for the largest share of the tax base (65.03±3.57%), followed by salty snacks (12.99±2.65%), condiments (8.40±1.94%), cocoa powder (2.93±1.02%) and jams (0.09±0.07%). Among beverages, soft drinks (72.31±9.63%) were the most important, followed by alcoholic beverages (4.21±2.79%). In contrast, alcoholic beverages accounted for 74.03% of the tax income within beverages, and 43.31% of total tax revenue in 2021.

CONCLUSIONS: The tax base and rate of PHPT have consistently increased since 2013. Although alcoholic drinks have no longer been taxable as of July 2022, the positive impact of the tax is primarily attributed to its role in generating resources for the Hungarian Health Insurance Fund and health promotion programmes.