Parliament backs proposal for NAC to manage sugar tax

The proposal seeks to use the NAC’s experience in managing the AIDS levy as a model for mobilising and ring-fencing additional domestic resources for health, particularly the prevention and treatment of non-communicable diseases (NCDs) and mental health conditions.

The committee’s chairperson, Discent Collins Bajila, said Zimbabwe needed to rethink how health care was financed, arguing allocations to the Ministry of Health and Child Care often fall short of both the country’s commitments and the amounts requested by health institutions.

“There is a need for a change in funding mechanisms,” Bajila said.

He pointed to the 2001 Abuja Declaration, under which African Union member states committed to allocate at least 15 percent of their annual national budgets to health.

Bajila said Zimbabwe’s budgeting process had become contentious because the government could allocate a lower percentage directly to the Ministry of Health while arguing that spending by other ministries also contributed to health outcomes.

“The challenge is the Minister of Finance or Treasurer will allocate nine percent of the national budget towards health and once that nine percent has been allocated, they will then argue that ‘when we put some money to defence, defence takes care of the health needs of Zimbabweans who work in the defence sector. Therefore, you already have money.’”

Bajila said similar arguments were made about health-related spending in other ministries, such as the provision of sanitary pads through the Ministry of Primary and Secondary Education.

“You can’t count it that way,” he said, arguing such expenditure should not be used to obscure the amount directly allocated to the health sector.

The problem, he said, was compounded by under-disbursement, where government departments receive only part of the amounts approved in the national budget.

“And secondly, once they allocate that nine percent instead of 15 percent, there is something called disbursement. They will then disburse six percent, ” Bajila said.

“They don’t always disburse the full amount of what was there. So that is where there is a problem.”

Against this backdrop, the committee is supporting a proposal to expand the mandate of the NAC beyond the collection of the AIDS levy.

Bajila said the council could be given responsibility for collecting and administering other health-related taxes, with the money legally ring-fenced for health programmes.

“One of the things we can do to really stabilise our health sector as a country could be to expand the mandate of the NAC such that it does not collect only the AIDS levy. It must collect the sugar tax,” he said.

The proposal was initially raised through petitions submitted to Parliament by Jacob Ngwenya, executive director of the Zimbabwe Non-Communicable Diseases Champions Network, and another petitioner, Ms Nhongo.

The petitioners called for the repeal of the National AIDS Council Act and its replacement with a comprehensive National Health Council Bill, arguing Zimbabwe’s HIV response provides a model that could be adapted to tackle the growing burden of NCDs and mental health conditions.

Bajila said the committee had conducted public hearings to establish whether the proposal was workable.

“The committee actually also did public hearings at various institutions to check if this is the kind of thing that can work and people are saying it can work,” he said.

This proposal comes as Zimbabwe faces increasing demand for the prevention, diagnosis and treatment of conditions such as diabetes and hypertension.

Bajila argued taxes imposed on products associated with NCD risks should contribute directly to addressing the health problems they are intended to mitigate.

“We saw here at NatPharm some equipment that has been bought by the government of Zimbabwe using sugar tax,” he said.

“But when you see this kind of equipment, you then ask yourself is this not only a portion of the sugar tax. Had we been giving to the Ministry of Health all the sugar tax, where would we have been in fighting non-communicable diseases and so forth? We would have been very far.”

He proposed that the initial priority for sugar-tax revenues should be diagnostic capacity before expanding spending to medicines.

“The first level of using sugar tax is to make sure the scanning, testing, equipment and so forth is available at least at every central and provincial hospital. Thereafter, we will then begin to channel it towards medicines,” Bajila said.

The longer-term proposal is to make sure essential NCD medicines are available at primary health-care level, where patients can receive treatment without having to travel to higher-level facilities.

Bajila said rising cases of hypertension, diabetes and other chronic illnesses required a financing mechanism capable of supporting services at local clinics.

However, expanding the NAC’s mandate would require legislative changes because health-related taxes currently flow into the government’s general revenue pool.

Bajila said Zimbabwe’s Constitution requires taxes and levies to be paid into the Consolidated Revenue Fund, unless Parliament creates a specific legal framework to ring-fence the funds for a particular purpose.

He cited other taxes introduced with health-related objectives that are nevertheless paid into the general revenue pool.

“What is this fast-food tax? It’s not going to the health sector. But the reason why it was brought forward was to make sure people are less likely to get these diseases from fast foods,” Bajila said.

He also referred to an airtime tax that was introduced partly to support health-related interventions, including mental health, but which similarly does not operate as a dedicated health fund.

The committee therefore sees legislative reform as central to the proposal.

A key argument for expanding the NAC’s role is Parliament’s assessment of how the council has managed the AIDS levy.

Bajila said the committee had examined Auditor-General reports as part of its assessment of the council’s financial management.

“NAC has given us a lot of confidence in terms of how it manages the funds. Because we look at the Auditor General’s reports… In terms of their probity with funds, they have been doing very well.,” he said.