Online Reporter
CREATIVE financing through special taxes and ring-fenced revenue has become a hallmark of the Second Republic’s determination to upgrade the public health sector, so ensuring Zimbabweans have access to the latest health technology.
Two taxes are directly assigned to the Ministry of Health and Child Care to buy cancer equipment and, presumably as time marches on, other advanced equipment.
There is the tax of one tenth of a US cent on every gram of sugar used in beverages, hardly a major imposition on consumers, but highlighting the large tonnage of sugar in what we drink, raising US$29,2 million in 2024 and US$59,4 million last year.
The other direct tax is the 5 percent special excise duty on airtime and data bundles, not a huge figure.
The Health Ministry gets half of this cash directly, the other half going into general Government revenue along with most other taxes.
But that half, 2,5 percent of all airtime and data bundles even beats the sugar tax, amounting to US$57,4 million in 2024 and US$66,2 million last year. This money is paid into a special health fund. By last year US$212 million had been paid over the two years into that fund, giving the Health Ministry the resources to place orders for this high end equipment.
The ordinary costs of the Ministry of Health and Child Care come from its budget allocation to pay for staff, consumables, medicines, ordinary equipment and other general expenses. The health fund money is an addition that allows the ministry to start buying high end equipment, starting with the cancer machines which are very expensive.
While no one likes paying taxes, the tax on sugar in drinks and the airtime tax have generally gone through with little opposition and those Zimbabweans who think about them probably at least know their dollars are going on something specific and needed to keep people alive.
There were queries about how effective the ring-fencing was, but these were answered when the first new cancer machines in decades were bought.
The money was being saved up until it could meet the bills, and in any case this sort of equipment is not bought off the shelf in some sort of health supermarket but is made to order.
The Finance, Economic Development and Investment Promotion Ministry has noted that installation of cancer machines is a very complex process and is still under way by the Health Ministry at Parirenyatwa Group of Hospitals and Mpilo Hospital. Other work had to be done first to install the equipment. More is on order.
The two older cancer machines at the two hospitals will be dismantled and sent to other hospitals, providing a service until the new taxes provide enough extra revenue to fund the acquisition of the latest equipment.
It is no secret that the public health sector suffered extensively during the hyperinflation and subsequent years, and was in any case seriously underfunded in the previous decades of import controls and exceptionally tight allocation of foreign currency.
So at the moment a lot of the required work is catching up on what was missed out, as well as making sure that Zimbabweans have access to the latest technology. It goes beyond a simple upgrade or modernisation, hence the extreme importance of the extra revenue.
Other taxes are also assigned to health needs. The AIDS levy, a percentage of the income tax already paid by corporates and individuals, has been instrumental in helping combat HIV and buy the necessary medication that can be given out for free if that is needed.
We are also assigning gambling taxes to health requirements, and there has been a general agreement in debate that more of the so-called “sin taxes” on things like cigarettes and alcohol should be ring-fenced for health.
This self-help approach has proved useful in accessing the diminishing support from development partners, since we can prove we are doing quite a lot ourselves. But it becoming increasingly obvious that we are going to have to fund our own health costs, hence the need for the innovative financing.
We can no longer expect much outside support, so we need this extra money raised, as painlessly as possible, from our own resources as well as increasing the ordinary budget allocations for a wider range of expenses that can be considered ordinary.
High rates of economic growth also help, since the percentage of national gross domestic product going on taxes remains roughly constant, so a higher GDP means more tax money without increases in rates.
