Lobby groups push for sin tax to tackle lifestyle diseases

What you need to know:

Lobbyists say such ring-fencing is helping health services in countries like Romania and Indonesia as well as in Latin America.
They say a tax could be imposed on establishments offering foods such as broiler chicken, pizza and sugary drinks. Farmers of broiler chicken would equally be taxed.

Lobbyists are pushing the Treasury to set aside a percentage of sin tax for the health sector to mitigate ailments linked to alcohol and cigarette consumption.

They are also seeking at least a two per cent levy on fatty and processed foods that expose people to certain conditions or ailments, including obesity and heart disease.

Peter Ngure, team leader at German health-focused NGO Deustche Stiftung Weltbevoelkerung (DSW), said such ring-fencing is helping health services in countries like Romania and Indonesia as well as in Latin America.

He was making a presentation at pre-budget hearings organised by the Institute of Economic Affairs. The institute is putting together presentations from various sectors for forwarding to the Treasury.

Mr Ngure said a tax could be imposed on establishments offering foods such as broiler chicken, pizza and sugary drinks. Farmers of broiler chicken would equally be taxed.

“Countries have used this type of taxation to improve the health sector. The reasoning is that since your occupation is contributing to unhealthy lifestyles, then you should pay something to contribute to a remedy for lifestyle diseases,” said Mr Ngure.

He claimed, for example, that the 2015/16 preliminary Budget estimates did not provide financing or mention Level Five hospitals, many of which serve patients from more than one county.

Beatrice Gachambi, programme officer at the NGO Health Rights Advocacy Forum, said the health sector lacked adequate human resources.

Ms Gachambi recommended that cash collected by Level Four hospitals (previously district and sub-district entities) be used by the same institutions instead of being first aggregated at the county treasury before being released to the same facilities.

“Funds generated by the Level Four hospitals should not be taken to the treasury of the county first,” she said. “The funds should be used by the same hospitals. The hospitals should be designated as entities that have authority to incur expenditure so that they spend the money without breaching the law.”

Mr Ngure said county governments should sign memoranda of understanding with the Kenya Medical Supplies Agency so the agency can deliver medicine on credit rather than having to wait until cash is available.

Ms Gachambi gave the example of Embu, where drugs could not be delivered till December last year as the county had to go through procurement procedures.

Mr Ngure also noted that the Budget cash allocated to the health sector was not adequate at Sh2,100 per person, which is just about half of the Sh4,000 recommended as best practice by the World Health Organisation.