Uganda’s health sector is currently dealing with serious difficulties as a result of the loss of vital donor funding due to the passing of the Ant-Gay law last year, After such a sudden change, politicians and policymakers are wrestling with how urgently they need to look into new finance systems to continue providing basic healthcare services.
To protect the health and welfare of the country, members of parliament sitting on the Health Committee are urging the government to quickly develop and put into action strong domestic funding plans as the sector negotiates these choppy waters.
Their demands that the government come up with and carry out alternate funding plans are a direct result of their enduring concern for the well-being of the populace and the stability of the healthcare system.
In this setting, the investigation of domestic funding sources is the main focus, and legislators are promoting creative ways to raise money for the health sector. This could mean taking steps like raising taxes on specific products or services, redistributing revenue from the budget, or creating health insurance programs to raise money on the inside.
These new ideas were frontline by Charles Ayume, Chairperson Health Committee while presenting the report on the 2024/25 ministerial policy statement for the health sector.
He noted that over the years, Health Development Partners have supported the healthcare system, especially in the areas of immunization, HIV/AIDS, TB, Malaria control and Infrastructure development. However, the Committee is concerned about the shrinking resource envelope due to global factors and a shift of priorities.
“In light of the constrictive fiscal space, the committee observes that the Government should consider some innovative domestic financing mechanisms to generate some additional revenue for the health sector,” he noted
In the course of his presentation, Dr Ayume (Koboko Municipality) went into further detail on the possible advantages of increasing taxes on dangerous goods like alcohol and tobacco in order to bridge the financial gap created by declining donor contributions to Uganda’s healthcare system.
His proposal to raise taxes on certain commodities by twenty per cent underscored the need to address harmful consumption habits while also increasing government revenue.
Parliamentarians emphasized the proposal’s economic feasibility by stating that the country may experience significant financial gains from this type of tax reform. If the proposed tax hike is enacted, they predicted that Uganda’s income might soar from US$95.3 million (Shs362.412 billion) in the fiscal year 2022/23 to a substantial US$726.49 million (Shs2.762 trillion) by the fiscal year 2026/27.
The Committee also stressed the significance of designating funds from the social media tax to improve health centres and finance community health. This suggestion is made because of the considerable financing gap that exists for the recently implemented community health strategy, which has not yet received sufficient funds.
The Committee outlined the plan and emphasized that allocating money from the social media tax to community health programs and improvements to healthcare infrastructure will close significant funding shortages. The government might guarantee the sustainability and accessibility of basic healthcare services at the local level by ring-fencing these funds.
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