MPs want alcohol, cigarettes to meet donor funding deficit

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MPs want alcohol, cigarettes to meet donor funding deficit
Alcohol and cigarettes

The Health Committee of Parliament has called for a 20-percent increase in taxes on harmful products such as alcohol and tobacco to offset the reduction in funding from donors to the health sector.

MPs argue that this increase could potentially boost Uganda's revenue from $95.3 million (Shs362.412 billion) in FY2022/23 to $726.49 million (Shs2.762 trillion) by FY2026/27.

Additionally, the Committee urges the government to allocate proceeds from social media taxes to upgrade Health Centers and support community health financing, as the existing community health strategy lacks adequate funding.

Dr Charles Ayume,chairperson of the Health Committee, expressed concerns over the diminishing support from Health Development Partners, particularly in critical areas such as immunization, HIV/AIDS, TB, malaria control, and infrastructure development.

He emphasised the necessity for innovative domestic financing mechanisms to address the shrinking resource envelope and changing global priorities affecting Uganda's health sector.

Also read: Govt seeks funds to destroy expired COVID vaccines

Cigarettes could be too expensive for smokers if new taxes mooted are approved | Courtesy

"In light of the constrictive fiscal space, the Committee suggests that the Government explore innovative domestic financing mechanisms to generate additional revenue for the health sector," Ayume said.

The Koboko Municipality MP wase presenting the report on the 2024/25 ministerial policy statement for the health sector.

Parliament has been informed that by December 2023, 10 million COVID-19 vaccines had expired in the stores of the National Medical Stores (NMS), prompting calls for funds to destroy these expired vaccines.

"Due to low demand, COVID-19 vaccines are expiring in medical stores, necessitating funds for incineration," he said.

By December 2023, 10 million doses of Johnson & Johnson vaccines had expired. Funds should be allocated to the National Medical Stores for the retrieval and destruction/incineration of expired Covid-19 vaccines and related supplies," Ayume added.

MPs are advocating for an additional allocation of Shs262.79 billion to the National Medical Stores (NMS) to bolster the supply of Essential Medicines & Health Supplies gradually, starting with Shs87 billion in FY 2024/25.

This move aims to address 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 said.

"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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