BACKGROUND AND IMPLEMENTATION CHALLENGES: Public health advocates often call for the earmarking of tobacco excise revenue. Ministries of Finance typically dislike earmarking, because it introduces rigidities in the budget process, and/or there is the assumption that the funds will not be well spent. The Jamaican government wanted to implement universal health coverage in the 1990s and early 2000s, but, because of significant fiscal constraints (two-thirds of government expenditure was used to service the public debt), this could not be funded through the general budget.
INTERVENTION OR RESPONSE: In lieu of universal health coverage, Jamaica's government created the National Health Fund (NHF) in 2004, which provided subsidized medication to people with specific diseases. The NHF was funded through earmarked taxes on (1) tobacco, (2) other excisable products (mainly alcohol), and (3) payroll taxes.
RESULTS AND IMPACT: The NHF has been very successful, and is popular. Because it has been funded through earmarked revenues, the NHF has been protected from the vagaries of general budget processes. The Jamaican example is important for other countries:

1. When there are no existing revenues for new projects, the new projects have to be funded from alternative sources. Increasing health taxes and earmarking the revenue is a good source.
2. The earmarked project should not decrease the revenues that would typically flow to the general revenue fund.
3. Good precedents with other earmarked projects makes it easier to create another earmarked project.
4. Earmarking health taxes for a particular project should not be onerous for the tax collecting authorities.
5. There must be a very clear plan to use the earmarked taxes.
6. The earmarked project, possibly more so than other projects, needs good governance and oversight.
7. Countries should consider diversifying the revenue source for large projects funded by earmarked revenues.

CONCLUSIONS: Jamaica's experience with health tax earmarking has been extremely positive. Countries in a similar fiscal situation can learn much from Jamaica.