We examine whether the COVID-19 pandemic enabled low- and middle-income countries (LMICs) to expand fiscal space for health through domestic revenue mobilization, or whether binding fiscal constraints limited health financing responses despite unprecedented system-wide pressures. Using panel data for 85 countries over 2015–2022 and system-GMM estimation, we find that taxation capacity positively affects government health expenditure, confirming fiscal space as the binding constraint on health financing. Critically, the pandemic did not systematically alter this relationship. However, we document substantial heterogeneity masked by this null average effect. Low- and lower-middle-income countries that implemented tax reforms during 2020–2021 sustained health expenditure increases through 2022, whereas countries relying on deficit financing experienced spending reversals. Upper-middle-income countries show no pandemic strengthening of the fiscal space-health relationship. These findings challenge the conventional view that health crises automatically generate political will sufficient to overcome fiscal constraints, demonstrating instead that administrative capacity to expand revenue determines whether reform windows translate into sustainable financing. For universal health coverage strategies, the results imply that building tax administration capacity during normal periods constitutes essential crisis preparation, as robust collection infrastructure cannot be rapidly developed amid sudden economic shocks.