Summary:
The Health Committee of Parliament proposes a 20% tax increase on alcohol and tobacco to offset donor funding reductions in Uganda’s health sector. They advocate redirecting social media tax proceeds to upgrade health facilities.
The Health Committee of Parliament is urging for a 20% hike in taxes on harmful substances like alcohol and tobacco, aiming to counterbalance the decrease in health sector funding from donors. MPs assert that this adjustment could potentially escalate Uganda’s revenue from $95.3 million (Shs362.412 billion) in FY2022/23 to $726.49 million (Shs2.762 trillion) by FY2026/27.
Furthermore, the Committee advocates for directing proceeds from social media taxes towards upgrading Health Centers and supporting community health financing. This is in response to the inadequacy of funding in the existing community health strategy.
Dr. Charles Ayume, chairperson of the Health Committee, voiced concerns over dwindling support from Health Development Partners, particularly in critical areas such as immunization, HIV/AIDS, TB, malaria control, and infrastructure development. He stressed the need for innovative domestic financing mechanisms to address the shrinking resource pool and evolving global health priorities affecting Uganda.
“In light of the constrained fiscal space, the Committee suggests that the Government explore innovative domestic financing mechanisms to generate additional revenue for the health sector,” Ayume stated.
Presenting the report on the 2024/25 ministerial policy statement for the health sector, the MP for Koboko Municipality highlighted that by December 2023, 10 million COVID-19 vaccines had expired in the National Medical Stores (NMS), prompting calls for funds to dispose of them.
“Due to low demand, COVID-19 vaccines are expiring in medical stores, necessitating funds for incineration,” Ayume explained.
The expired doses of Johnson & Johnson vaccines totaled 10 million by December 2023. Allocation of funds to the National Medical Stores for retrieval and destruction/incineration of expired Covid-19 vaccines and related supplies is imperative,” Ayume added.
MPs are pushing for an additional allocation of Shs262.79 billion to the National Medical Stores (NMS) to gradually strengthen the supply of Essential Medicines & Health Supplies, beginning with Shs87 billion in FY 2024/25. This initiative aims to bridge the funding gap resulting from reduced donor support to Uganda’s health sector.
“There is ongoing underfunding of the National Medical Stores. The current funding gap stands at Shs232.54 billion, exacerbated by the withdrawal of external support,” Dr. Ayume expressed.
“This shortfall will impact the availability of critical medicines and supplies necessary for healthcare and the achievement of health outcomes outlined in the National Development Plan III.
“This situation is alarming considering the reduction in donor support for anti-malaria, TB medicines, laboratory commodities, and immunization supplies.”
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Uganda’s Health Committee Calls for Tax Hike on Tobacco, Alcohol
