Italy announcing its proposal on innovative finance for health

On May 29th , Italy officially presented its innovative fiance proposal to leaverage resources for health financing beyond ODA. to the official document, the De-Tax aims to earmark a share of VAT taxes generated by participating businesses in participating countries for health systems development, combined with a voluntary contribution from businesses. The participating government would divert 1% or more of VAT on any good or service sold by businesses associated with the initiative to a designated fund for health systems development, while businesses, on a voluntary basis, would commit a share of their profits on related transactions to the same fund. De-Tax is aimed at fostering private solidarity. Its success depends on the number of participating businesses and the level of consumers’ support. Revenues would depend, in part, on the level and quality of publicity, and the administrative and transaction costs imposed on businesses.

In Italy the de-tax was launched on an experimental basis in 2003 in a triennial measure (2003-2005) and an overall coverage of 11 million Euros, the initiative never got off the ground. It has now been re-proposed with a focus on developing countries, but its philosophy is completely contrary to the international principles of aid efficiency and risks increasing the cost of transactions and fragmentation, making the entire aid system even more complex.