Broad system of taxes on unhealthy foods, possibly combined with subsidies for certain healthy foods is one of the public health policy direction. This paper assesses possible rationales for such a tax, examining arguments and historical development of health taxation in Latvia. The objective of study is to examine rationales for tax, including behavioural issues and develop proposals for the future development in Lat-via. The conventional quantitative and qualitative data analysis methods of economics as well as induc-tive and deductive research methods were used. The research resulted in the creation of the proposals for the possible food tax system as part of health financing model.