Taiwo Oyedele, chairman, presidential fiscal policy and tax reforms committee has disclosed that a draft policy is currently underway to channel revenues from excise taxes on alcohol, tobacco, and sugar-sweetened beverages for health financing, in a bid to secure sustainable financing for the country’s ailing healthcare system.
Oyedele informed that his committee, set up to overhaul Nigeria’s tax system, is already working on the policy, which will be submitted to the Minister of Health and Social Welfare in due course.
Speaking at a national dialogue on health financing in Abuja on Thursday, Oyedele said the move reflects a recognition that, ultimately, health systems are funded by taxpayers. He also described these proposed taxes otherwise known as sin tax as a low-hanging fruit in Nigeria’s health sector.
“At the end of the day, health is funded by taxpayers. We must recognise that. People often talk about health being free abroad, but it is taxpayers who pay for it. Government must put in place the right policies to ensure efficiency,” Oyedele said.
“My committee is already working on a draft policy, which we’ll share with the Honorable Minister in due course. We think this will help us greatly”, he added.
The tax man argued that excise duties on products such as alcohol, tobacco and sugary drinks should not be lumped into the federation account where they are shared across different levels of government, but rather earmarked for healthcare delivery.
“I don’t even think we should call it sin tax, maybe lifestyle tax. Whatever we call it, those revenues should be dedicated to health outcomes. Right now, they go into the federation account and are shared. That, for me, is a low-hanging fruit,” he said.
He, also stressed the need for Nigeria to adopt a transparent and efficient framework that channels existing revenues directly to health outcomes.
He added that carbon tax, particularly on polluting activities such as gas flaring, should also be structured to channel proceeds towards healthcare, given the environmental and health impact of such practices.
“It’s really about people. If there’s no human being on this planet, nobody would care about the environment. So if we do carbon tax, why don’t we dedicate part of it to health financing?” he said.
The tax man also pointed to recent reforms in the new tax laws, which he said will take effect from January, including the zero-rating of medical equipment and drugs for VAT purposes. According to him, this would reduce the cost of health services and improve access.
(Business Day)
