Stakeholders’ Dialogue on Pro-health Tax Implementation

In a bid to deliberate on the implementation of Sugar-Sweetened Beverage, SSB, taxation and its potential as a means for increasing healthcare financing, Nigeria Health Watch, in partnership with PharmAccess Foundation, and the World Bank, recently hosted global health stakeholders at its Health Financing Policy Dialogue, themed, ‘New Health Financing Approaches in Nigeria: Implementation of Sugar-Sweetened Beverages, SSB, Tax in Nigeria. Sunday Ehigiator reports

In January 2022, the Federal Government (FG) hinted at the imposition of N10 per litre tax on Sugar-Sweetened Beverages (SSB) as part of the critical policy thrusts of the Finance Act 2021.

The SSB tax was passed in the Finance Act on 31 December 2021 and was thereby implemented on June 1, 2022.

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed explained that the tax became inevitable to discourage excessive consumption of sugar in beverages, which had continued to imperil the lives of Nigerians.

Specifically, she said, “This new sugar tax is introduced to raise excise duties and revenues for health-related issues and other critical expenditures. It is in line with the 2022 budget priorities.”

Positives

The SSB tax implementation is seen as a win-win situation by the government which hopes the tax will trigger shifts in consumption and purchasing behaviour, incentivise product reformulation, and increase government revenues to fund public services and goods.

It was equally celebrated by stakeholders, particularly by the health sector operators who hoped that the revenues generated would help to provide infrastructure in the country’s health sector, and among other things cater to the victims who had been afflicted by sugar-related health challenges, such as weight gain, overweight, obesity, type-2 diabetes, dental caries, metabolic syndrome, cancer, etc.

However, the implementation of the SSB tax remains at the baby stage and is yet to transcend the aspirations of both the government and every other concerned stakeholder

Exploring Pro-health Taxes

As other concerned stakeholders continue to await the visibility of the projected positive outcome of the SSB, the global healthcare stakeholders at the event sought to explore various strategies to utilize pro-health taxes as an additional source of health financing for Nigeria, while leveraging on the SSB taxes.

In her remarks, the Country Director, PharmAccess Foundation, Njide Ndili, commended the Minister of Finance on the prompt implementation of the SSB tax following intense advocacy which was supported by critical stakeholders in the country’s healthcare sector.

She stressed the importance of increasing health financing and ring-fencing the proceeds from the pro-health taxes as another avenue to funding the health sector in Nigeria.

“The COVID-19 pandemic significantly reduced the external funding from other countries as development aid, because they focused on retaining their funds to manage the effects of the pandemic on their health systems.

“This is, therefore, a turning point for low and middle-income countries in Africa, including Nigeria, to focus on innovation and local resource mobilisation to fund the healthcare sector.”

“With the recent passing of the National Health Insurance Authority (NHIA) law making health insurance mandatory, it is imperative that we mobilise enough resources to fund health service delivery, especially for those who cannot afford to pay for themselves.”

In her goodwill message, the Consulate General of the Kingdom of the Netherlands, Lagos, Sonia Odije-Fajusigbe, suggested that “Nigeria’s Health Insurance Scheme should be decentralised to meet the growing need of the nation and to see that there is more funding for the health sector of Nigeria.”

Similarly, the Director General of the National Health Insurance Authority (NHIA), Prof. Mohammed Sambo, noted that the cost of treating mild to moderate diabetes has become an additional financial burden for individuals affected, as it ranges from N300,000 to N500,000 per annum, and could run into millions in very severe cases.

He said over 82 million Nigerians live on less than $1 per day. “If we must achieve Universal Healthcare Coverage (UHC), we must then prioritise health financing, especially through additional taxes or mandatory insurance.

“This is what many developed nations have done. The SSB tax and National Health Insurance Scheme provide Nigeria with a revolutionary chance to attain better healthcare services that will decrease Nigerians’ suffering in accessing healthcare.”

Earlier, while welcoming the stakeholders, the Managing Director, Nigeria Health Watch, Vivianne Ihekweazu, expressed gratitude to the federal government for implementing the SSB tax.

She however expressed concerns about the compliance with the SSB tax by the concerned companies, and therefore premised the importance of exploring the pro-health tax option on the perceived shortcomings of the SSB.

Also speaking, the Chairman of the Senate Committee on Health, Senator Ibrahim Oloriegbe, spoke on the difficulty of collecting these taxes.

He noted that one of the major challenges with the SSB taxation is the problem of the collection as the payers are always complaining that they are being taxed in multiple ways.

“Apart from that, we are all aware of the struggle over our federalism as to who is to collect or not collect value-added taxes (VAT). This is also a major obstacle that is stifling our efforts.”

He, therefore, stressed the effective utilisation of funds into channels that will create lasting solutions in the country’s health sector.

In his remarks, the DG of the Budget Office of the Federation, Mr Ben Akabueze, stressed the importance of SSB taxation implementation. He noted that 54 countries in the world and five in Africa have introduced SSB taxes.

He, therefore, expressed hopes for the effectiveness of the SSB tax as a tool to improve the quality of life of Nigerians, especially in the area of health.

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The Sugar-Sweetened Beverage tax and National Health Insurance Scheme provide Nigeria with a revolutionary chance to attain better healthcare services that will decrease Nigerians’ suffering in accessing healthcare