Sin taxes must finance health

Sin taxes must finance health
Published: 18 January 2018 (134 Views)
Legislators on Tuesday recommended that Finance minister Patrick Chinamasa introduce sin taxes on unhealthy sugary foods and an additional tax on swipe transactions in order to get additional funding for critical sectors such as health.

Bulawayo South MP, Eddie Cross , while presenting a report on the 2018 national budget by the Finance Portfolio Committee, suggested an additional five cents tax on electronic transactions, something that is likely to draw the ire of Zimbabweans, who have seen a surge in prices in recent days.

"I suggest putting a small tax on electronic transactions because I consulted the Bankers' Association of Zimbabwe and tax experts and they estimated $19 billion as gross domestic product (GDP) in 2018, and that swipe transactions in 2017 were $75 billion, while RTGS [real time gross settlement] transaction were $50 billion," Cross said.

"Through economic activities, we are looking at electronic transactions of $180 billion per week, and to me it reflects that our economy is actually of a bigger size than the figure reflected by the minister in excess of $40 billion, and I believe we can provide money for our health sector if we put a small tax of $0,05 on electronic transactions."

Cross said such a tax would raise about $9 billion in new revenue.

"I have spoken to the finance committee and they urged me to make sure that the matter is raised," he said.

"If you put five cents tax on electronic transactions it will be easy to collect the money because if you swipe, you pay five cents to the minister of Finance and it will solve our problems, reduce expenditure by 35%, and ensure we settle our bills to multinational agencies."

Binga North legislator, Prince Sibanda also presented a report on the 2018 health budget by the Parliamentary Portfolio Committee on Health and Child Care, where it was recommended that sin taxes be introduced on sugary foods and drinks.

"We propose that a sin tax be introduced on sugary foodstuffs and drinks to fund treatment of non-communicable diseases," he said.

"We believe that sugar is a serious contributor towards non-communicable diseases and to adequately fund the health sector we believe that a levy must be introduced on all sugary foods."

Sin taxes are often imposed on beer and tobacco in order for governments to raise revenue to fund health services.

The health committee also demanded that Chinamasa increase the Health budget by an additional $345 million on top of the $408 million that it was allocated in 2018.

The committee said MPs agreed during the 2018 pre- and post-budget seminars that the 2018 budget will not be passed unless the Health budget meets the 15% requirements as per the Abuja declaration.

"The health budget is currently 5,8% of the national budget and even if we consider the $30 million from the health levy, the budget will still not go beyond 6,2%," Sibanda said.

He said foreign currency must be readily available for drug purchases and other medical equipment, adding that the current job freeze can be implemented in other sectors, but not the health sector as it is very critical.

MPs demanded that Chinamasa increase Parliament's budget from $57 million to $98 million.

- newsday

Tags: Tax, MPs, Health,
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