Call to introduce sin tax

HARARE - Government is broke and everyone knows that, hospitals are on the deathbed and the signs are there to see but beneath all the gloom people continue to smoke and drink.

Puffing up their worries and sipping their sorrows away, many seem immune to the worsening economic situation.

But, that is most certainly not the case, notwithstanding falling beer prices.

However, their addictions are “sinful”, at least to some experts who now want a sin tax imposed on alcohol and cigarettes.

The experts say government must consider introducing sin taxes so as to fund the country’s crippled health sector.

Economic Development Research Institute of Zimbabwe (Ledriz) senior economist Prosper Chitambara said the southern African country — which has a high burden of disease and infections — must cut down on military expenditure and use the money towards health.

“Developed countries spend 20 percent of their (Gross Domestic Product) GDP on health per capita, however Zimbabwe only spends on average $120 per year for health on each person,” Chitambara said at a health budget meeting in Harare last Monday.

“Military spending and debt servicing are the two areas of current government expenditure that tend to take the lion’s share of the fiscal space, to the detriment of the health sector

Zimbabwe should learn from countries such as the Philippines that have introduced a sin tax or a corrective tax. Corrective taxes, or ‘sin taxes,’ are levied on goods and services that are considered to be bad for the individual or society at large. Examples include taxes on alcohol, cigarettes and products and activities with negative environmental consequences.”

In the 2015 National Budget, the ministry of Health was allocated $300 million — which is half of the required 15 percent approved under the Abuja Declaration.

Chitambara said sin tax could improve fiscal revenue streams while promoting good public health.

“A review of literature in a number of countries has demonstrated that tobacco taxes reduce tobacco consumption while providing a stable and reliable source of fiscal revenues. Government must rethink its focus and delivery mechanisms.

“Reducing unproductive expenditures, particularly those of a recurrent nature, should be the first option. This can be achieved by cutting back on military expenditure as well as reducing foreign travel and embassy expenses,” said Chitambara.

His sentiments come on the backdrop of resolutions made by world health practitioners and ministers, including Zimbabwe’s David Parirenyatwa, for individual countries to look into how they could mobilise resources for health.

“One of the things we spoke about was how our own fiscus should be able to provide a solid base into health funding, the private sector and then donors and funders are the last option because they can opt out anytime,” said Parirenyatwa after a meeting in the Vatican City recently.

According to a recent World Health Organisation estimate, every year some 100 million people become impoverished and a further 150 million face severe financial hardship as a result of health care payments.

Only about 1, 2 million Zimbabweans are said to be covered on health insurance in the country.

Comments (1)

ndezvekupenga izvo

lularz - 27 June 2016

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