Espacio fiscal para salud en Honduras

ABSTRACT Objective To analyze sources of fiscal space for the health sector in Honduras, in the context of sectoral reform, with a commitment to achieving the target of public expenditure on health equivalent to 6% of gross domestic product (GDP). Methods An analysis of baseline conditions and sources of fiscal space was conducted on the basis of a literature review and secondary data. The size of each source was estimated from official data, international statistics, and previous studies. In parallel to this study, political feasibility was analyzed and an online survey was administered to key actors. Results Estimates of baseline conditions for economic growth show that other sources must be identified in order to generate new resources. The recent tax reform limits the political feasibility of creating new taxes, except for “sin taxes”, that could be used exclusively to fund health. Social protection reform paves the way to explore measures that could make resources available by improving efficiency in the sector. One limitation on public expenditure based on social security contributions is the ceiling on taxable income, notwithstanding acceleration in the formalization of the labor market. Conclusions Honduras can advance towards achieving the target of public expenditure on health equivalent to 6% of GDP with the support of plans for sectoral reform, but its options are limited by the recent tax reform. The reform of social protection in health should consider additional available resources so as not to jeopardize implementation of the reform.