An assessment of fiscal space for health in Peru

Abstract

[ABSTRACT]. Objective. To assess the fiscal space for health in Peru needed to attain the target of raising public spending in health to 6% of gross domestic product, as agreed by member countries of the Pan American Health Organization in 2014. Methods. The main sources of fiscal space were identified by means of a thorough literature review. Technical feasibility was determined from statistics and national and international surveys and by reviewing various documents and official reports. Political feasibility was ascertained by studying policy guidelines. Results. The sources showing the greatest technical and political feasibility are economic growth, a broadening of the personal income tax base, and an increase in tobacco-specific taxes. Decreasing informality in the job market and increasing contributory coverage are considered to be less politically feasible, but there is ample technical space for these measures. Conclusions. There is enough fiscal space to allow for an increase in public spending in health. Nevertheless, the 6% target will be reached only if the timeline is extended, tax revenues are increased, and informality in the job market is reduced.