Govt con­sid­ers ‘sin tax’

Chronicle (Zimbabwe) - - National News - Paidamoyo Chipunza Harare Bureau

THE Gov­ern­ment is con­sid­er­ing in­tro­duc­ing taxes on harm­ful prod­ucts such as al­co­hol and cig­a­rettes to in­crease do­mes­tic fi­nan­cial re­sources for health, amid rev­e­la­tions that the coun­try re­quires about $7,6 mil­lion be­tween 2015 and 2020 to im­prove na­tional health ser­vice pro­vi­sion.

Ad­dress­ing del­e­gates at the Com­mu­nity Work­ing Group on Health’s 23rd an­nual meet­ing held in Harare re­cently, plan­ning and donor co­or­di­na­tion of­fi­cer in the Min­istry of Health and Child Care Mr Gwati Gwati said, cur­rent fi­nan­cial re­sources to­wards health falls short of the na­tional needs.

“Full im­ple­men­ta­tion of the Na­tional Health Strat­egy (NHS) re­quires re­sources beyond what Zim­babwe can af­ford. The Min­istry of Health and Child Care will face tough de­ci­sions in pri­ori­tis­ing dif­fer­ent ser­vices in­duced in the NHS and work on gen­er­at­ing do­mes­tic re­sources for health,” said Mr Gwati.

He said the coun­try must there­fore con­sider in­tro­duc­ing “sin taxes” ear­marked on harm­ful prod­ucts such as al­co­hol and cig­a­rettes.

Ac­cord­ing to Gov­ern­ment’s pol­icy brief on do­mes­tic fi­nanc­ing pro­duced in May last year, tax­ing cig­a­rettes, beer, wines and spir­its has a po­ten­tial to raise at least $20 mil­lion an­nu­ally by 2022.

An­other op­tion on mo­bil­is­ing do­mes­tic fund­ing is in­tro­duc­tion of a once-off 5 per­cent ad­di­tion to the ex­ist­ing fuel levy, which could raise about $14 mil­lion in a year — cap­i­tal that could also be in­vested for emer­gen­cies such as road traf­fic ac­ci­dents.

Other in­ter­na­tional ex­am­ples Gov­ern­ment is look­ing at in­clude ear­mark­ing ei­ther one or two per­cent of Value Added Tax (VAT) for health, which could raise be­tween $100 mil­lion to $200 mil­lion a year.

Mr Gwati said these ini­tia­tives were pro­jected to raise suf­fi­cient funds to cover all fi­nan­cial deficits that could hin­der uni­ver­sal health cov­er­age by 2020.

“For both 2015 and 2016, the to­tal bud­geted fund­ing per capita falls short of the newly rec­om­mended fig­ures of $86 per capita for pro­vi­sion of pri­or­ity ser­vices,” said Mr Gwati.

In 2015, Zim­babwe’s per capita al­lo­ca­tion was $70, $16 less the new rec­om­men­da­tion, while this year it stands at $65. “This re­source gap is also un­der­es­ti­mated con­sid­er­ing that not all bud­geted fund­ing will be dis­bursed and some fund­ing will go to­wards over­heads and op­er­a­tions,” said Mr Gwati.

He said while non-com­mu­ni­ca­ble dis­eases such as can­cers, res­pi­ra­tory in­fec­tions and en­vi­ron­men­tal health associated dis­eases such as di­ar­rhoeal out­breaks were ma­jor causes of deaths in health in­sti­tu­tions, they re­ceived lit­tle fund­ing.

He said sev­eral pro­grammes re­ceived a ma­jor­ity of their fund­ing from ex­ter­nal fun­ders, leav­ing those pro­grammes at risk of sus­tain­abil­ity if ex­ter­nal fund­ing ends or pri­or­i­ties shift.

Mr Gwati said in­tro­duc­ing com­mu­nity health in­sur­ance schemes and en­sur­ing that Gov­ern­ment al­lo­cates 15 per­cent of its na­tional bud­get to­wards health were also vi­tal in en­sur­ing enough fund­ing for health.

“Do­mes­tic re­sources sup­port sys­tems cost while donor sup­port pro­gramme costs such as drugs and com­modi­ties. In 2015, 65 per­cent of Gov­ern­ment and lo­cal au­thor­ity fund­ing went to­wards salaries and ben­e­fits while 38,5 per­cent of the donor fund­ing went to­wards medicines and other com­modi­ties,” he said.

Gov­ern­ment and lo­cal au­thor­i­ties pro­vided about $426 mil­lion dur­ing 2015 while donors and other ex­ter­nal fun­ders pro­vided about $511 mil­lion.

The Com­mu­nity Work­ing Group on Health ex­ec­u­tive di­rec­tor Mr Itai Rusike said while do­mes­tic fund­ing was skewed to­wards salaries and ben­e­fits, Gov­ern­ment should also con­sider “sin taxes” as a way of dis­cour­ag­ing peo­ple from con­sum­ing harm­ful sub­stances.

“The pro­posal to in­tro­duce ear­marked sin taxes to fund health need to be fol­lowed through,” said Mr Rusike.

He said there was also need by Gov­ern­ment to ful­fil its regional com­mit­ment to al­lo­cate at least 15 per­cent of its na­tional bud­get to­wards health to en­sure in­creased do­mes­tic re­source mo­bil­i­sa­tion.

“Reach­ing the Sus­tain­able De­vel­op­ment Goals (SDGs) tar­gets re­quires a sus­tain­able mo­men­tum in fi­nanc­ing our health care sys­tem. While progress has been made in im­prov­ing our health in­di­ca­tors, there is need to sus­tain the mo­men­tum in do­mes­tic health fi­nanc­ing,” Mr Rusike said.

Bu­l­awayo yes­ter­day re­ceived a heavy down­pour forc­ing small ve­hi­cles off the flooded streets. The pic­ture shows some ve­hi­cles nav­i­gat­ing along a flooded Sa­muel Parireny­atwa Street. — Pic­ture by Eliah Saushoma

Pres­i­dent Mu­gabe

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