Govt increases sin tax to fund treatment of NCDs

Zimbabwe’s government has increased excise duty on cigarettes and energy drinks with the funds going towards the treatment of Non-Communicable Diseases (NCDs) such as cancer, high blood pressure and diabetes.

Excise tax is specifically levied on certain goods deemed harmful to society, such as tobacco and soft drinks or alcohol, which Finance and Economic Minister, Professor Mthuli Ncube has deemed necessary to plug the shortfall of funds for domestic health needs.

Long-term illnesses such as diabetes and cancer are more costly to treat, not only for the health sector but also for the economy.

Zimbabwe is facing a rising level of NCDs and in the 1990s, a four-fold increase was reported while the World Health Organisation (WHO) projected a 20 percent rise of NCDs by 2020 in African countries.

In his 2022 national budget presentation Thursday, the finance minister Mthuli Ncube proposed the increase of excise duty on cigarettes and energy drinks for the purpose of establishing a fund to treat NCDs.

“In order to benchmark excise tax rates with the practice in the region, thereby curbing illicit flows and also mobilise additional revenue to the Fiscus, I propose to increase excise duty on cigarettes from 20percent + US$5.00/1000 cigarettes to 25percent+ US$5.00/1000,” Prof Ncube said before Parliament.

“I, further, propose to introduce a flat rate of excise duty on energy drinks at a rate of US$0.05/litre, or the local currency equivalent.”

Prof Ncube noted that funds generated from the excise duty would go towards the creation of a Non-Communicable Diseases Fund.

“Incidences of non-communicable diseases, in particular, cancer, diabetes and hypertension are on the increase. Additional funds generated from the review of excise duty on cigarettes and energy drinks will be ring-fenced and appropriated from the Consolidated Revenue Fund, towards treatment and support of cancer, diabetes and hypertension patients through the Non-Communicable Diseases Fund,” he said.

In May 2021 during a World Health Assembly (WHA) 74th Session running under the theme ‘Ending this pandemic, preventing the next: building together a healthier, safer and fairer world,’ Zimbabwe called for increased funding of NCDs.

Acting Director for Oral Health, Dr Hardwicke Matikiti in the Ministry of Health and Child Care indicated there was a rise in the prevalence of NCDs globally and locally, citizens were concerned about low financial investments to enable the country’s health systems to pay particular attention to their management in view of their increase in the population, including by integrating into primary health care.

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