Why new tax on beauty products makes more sense than it looks

The measures reflect a growing policy trend across Africa, where governments are increasingly using taxation not only to mobilise domestic resources, but also to discourage products linked to potential health risks and rising healthcare costs.

The approach aligns with one of the central themes emerging from discussions among tax justice experts, civil society organisations and journalists at the International Tax Justice Academy (ITJA), where participants argued that effective tax systems should generate revenue while advancing broader social and economic objectives.

According to the minister for Finance, Khamis Mussa Omar, the 2026/2027 fiscal budget proposes a 10 percent tax on imported ultraviolet/light-emitting diode (UV/LED) gel nail-curing machines used for manicure and pedicure services, expected to raise Sh566.5 million in revenue

An additional Sh1.91 billion is projected from an increase in excise duty on beauty products classified under HS headings 33.03; 33.04; 33.05; and 33.07, rising from 10 percent to 15 percent.

“The objective of this measure is to widen the tax base and reduce potential health risks associated with the use of these products, including long-term cancer risk,” he told MPs.

The increase in beauty product taxes is also intended to expand the tax base while aligning Tanzania’s rates with those applied by several East African Community partner states.

Supporters argue that the measures reflect two principles increasingly promoted by tax justice advocates: strengthening domestic resource mobilisation and ensuring taxation also responds to public health concerns.

“Domestic resource mobilisation is the only sustainable way to finance Africa’s development priorities and reduce reliance on external funding,” said Tax Justice Network Africa Policy Officer Aya Douabou during the ITJA training.

Shrinking aid

That argument is gaining traction across the continent as governments grapple with shrinking aid flows, rising debt servicing costs, and growing demands for healthcare financing.

  Health tax advocates add another layer to the debate. According to TJNA Health Tax Unit officer, John Thomi, African countries are experiencing a rapid rise in non-communicable diseases, including cancers, cardiovascular diseases and diabetes.

He attributed the trend to urbanisation, population growth, changing consumption patterns, and aggressive marketing of potentially harmful products.

Mr Thomi said taxation can play a critical role in reducing consumption of products associated with health risks while simultaneously generating revenue for public services.

“Progressive health taxes help make harmful products less affordable over time while generating resources that can strengthen healthcare systems and disease prevention programmes,” said Mr Thomi.

Beyond direct health impacts, experts argue that harmful consumption patterns carry wider economic costs. Rising rates of chronic illness can reduce labour productivity, increase healthcare spending, and divert household resources away from education, nutrition, and investment. 

Tax Justice Network Africa Policy Associate, Mr John Njenga, said successful tax reforms in Africa require strong political commitment, broad consultation, and effective institutions.

He noted that while international financial institutions often provide critical support for fiscal reforms, policy prescriptions can sometimes prioritise fiscal discipline over social equity and political realities.

“The lesson for African countries is to build domestic technical capacity, strengthen transparency and accountability, and pursue gradual, well-sequenced reforms,” he said.

As the government accelerates efforts to modernise revenue collection through artificial intelligence, big data, and integrated digital systems, analysts say the success of such reforms will depend also on public confidence that the funds are used transparently and effectively.

That echoes a growing consensus among tax justice advocates across Africa: sustainable tax reform is not simply about collecting more revenue, but about ensuring that taxation supports inclusive development and delivers tangible benefits to citizens.