Health levy comes into force

Source: Health levy comes into force – DailyNews Live

Farayi Machamire      29 March 2017

HARARE – Government has begun deducting a five percent health levy on all
airtime purchases in a desperate bid to raise funds to acquire drugs and
equipment for public hospitals.

Finance minister Patrick Chinamasa proposed in his 2017 National Budget to
introduce the tax on airtime and mobile data, under the “Talk-Surf and
Save a Life” initiative.

The Treasury chief argued it had become unsustainable for both the
taxpayer and government to rely on a shrinking formal tax base and it was
“therefore, critical that all economically active individuals contribute
towards funding health services”.

The new health tax was gazetted on Friday and comes on the back of a raft
of new taxes aimed to increase the tax base and meet government’s $4,1
billion 2017 budget.

“The rate of special excise duty on airtime shall be 10 per centum (10
percent) of the sale value of airtime,” the gazette reads.

“Five per centum (five percent) of which shall be designated as a Health
Fund Levy and be credited to a fund established under section 18 of the
Public Finance Management Act . . . for the purchase of drugs and
equipment for government hospitals, provincial hospitals and district
hospitals as defined in the Health Service Act.”

The levy of five US cents for every dollar of airtime – expected to beef
up the $281 million budget allocation for the Health ministry – comes as
an added financial obligation for Zimbabwe’s mobile network operators.

This comes as medical practitioners now demand cash upfront before
attending to patients due to the none or delayed remittances by medical
aid insurers.

Consequently, the majority of patients fail to access health services,
with donors now contributing more funds than government to the health
sector.