Government introduces 5% tax on all phone calls

THE Government has proposed a five cent tax for every dollar spent on voice calls or Internet bundles in a bid to raise funds for the health sector.

The new levy will be implemented effective 1 January 2017.

Finance and Economic Development Minister Patrick Chinamasa announced the move while presenting the 2017 national budget statement yesterday.

He said the Government was struggling to effectively fund the country’s health sector hence the need to introduce the levy. Minister Chinamasa said the funding generated from the levy will be used to buy drugs and other equipment for public hospitals.

Most public hospitals in the country are struggling to meet daily operations and have been hit by a constant shortage of drugs with patients also failing to pay their hospital bills.

“The continued reliance on a shrinking formal tax base to fund critical sectors such as health is no longer sustainable, for both the taxpayer and Government. 

It is, therefore, critical that all economically active individuals contribute towards funding health services. It is, thus, proposed to introduce a health fund levy of five cents for every dollar of airtime and mobile data, under the theme, ‘Talk-Surf and Save a Life’” said Minister Chinamasa.

The Minister allocated $281.9 million to the Ministry of Health and Child Care in the 2017 national budget saying the proposed tax would improve the quality of health care in the country.

He said in the past the Government has over relied on development partners but the situation was not sustainable as the donors were also developing fatigue.

“This situation is not sustainable as development partners are also experiencing budget constraints, hence, have reduced their support,” said Minister Chinamasa.

He said the Government has noted that shrinking revenues had forced doctors to demand cash payments upfront compromising patients.

“This has been compounded by medical practitioners who now demand cash payments before providing the required services, due to the non or delayed remittances by medical aid schemes. Consequently, the majority of the patients fail to access health services,” said Minister Chinamasa.

Source-Herald