May 7, 2022
Sweet opposition
The Government may have to consider other ways of financing health care if it plans to levy taxes on certain food items.
Currently, health care, if not privately funded out of pocket or through insurance schemes, is subsidised by Government from funds it collects through taxes or from donations it gets from private sector and international organisations.
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The National Health Fund (NHF) payouts, which have climbed by 139 per cent over the last few years, has moved from near $5 billion in 2014 to $15 billion in 2021. The fund currently serves over 720,000 Jamaicans, most of whom are treated for non-communicable diseases, including diabetes, hypertension, and morbid obesity. Given the population’s worsening disease profile, it is estimated that over the next three years it could require up to $40 billion to address the needs of people with these illnesses.
“In 2020/2021, the NHF spent $1,275,706,612 on hypertension compared to $940,436,173 over the 2014/2015 period. In 2020/2021, the organisation spent $1,411,919,673 on diabetes compared to $887,349,881 in 2014/2015. This is a 59 per cent increase,” Minister of Health Dr Christopher Tufton said during his sectoral presentation in Parliament last week.
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Labelling the rising health cost as devastating, the minister said that a change in the funding model to reflect a more sustainable approach to financing the health sector or the use of policies and laws to change lifestyle patterns to improve health profile and ultimately reduce costs may become necessary.
MAHFOOD…taxing sodas, fast food or any other food groups will not necessarily change people’s eating habit or improve their health. This has been done in a number of countries and the obesity levels have not declined even as they increase the amount of tax
The Government, in previous attempts, has already, like many other countries, moved to impose certain measures in hopes of reducing the level of sugar in beverages offered to schoolchildren, but should a change in policy result in a tax on items considered unhealthy and bad for one’s health, early feedback has detected that this could result in significant blowback from some sectors.
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The Jamaica Observer, in examining the issue, found that an implementation of new taxation measures is not likely to go down well, especially among the producers.
While the World Health Organization (WHO) and other local bodies, including the Heart Foundation of Jamaica and the Jamaican Economy Panel (JEP) are all in favour of the implementation of sugar taxation measures. A number of stakeholders across the productive sector with whom we spoke categorically said they would not support the imposition of any such taxes if they were ever to become part of government policy.
The implementation of a tax on sugar and other items deemed bad for health has been met with opposition by the producers of goods.
Executive director of the Jamaica Manufacturers and Exporters Association (JMEA) Kamesha Blake, who was appointed to the post earlier this year, said she believes that a tax on certain food items will not necessarily meet the end goal of creating a healthier society, but will more likely add to government coffers.
Blake, in her assessment, said that while there is an immediate need to reduce instances of non-communicable diseases which have been adding to the current strain on the country’s medical resources, the answer was not to be found in taxing but instead through creating deeper partnerships across stakeholder groups.
“We know that there is an issue, however, as it relates to current realities, putting a special tax or sin tax on these items will impact people. We already have some policies in which we have been trying to reduce sugar from a manufacturing standpoint, of which our members are already on board, so what we want for our country is a more long-term measure,” she told Sunday Finance while making calls for wider stakeholder engagement between health and manufacturing as taxes for her were not to be seen as the first measure.
Chairman of the Wisynco Group William Mahfood, who is also in strong opposition to any form of new taxes said he thinks the country is already “highly taxed”.
Newly appointed executive director of the JMEA, Kamesha Blake
Echoing similar sentiments as Blake, Mahfood, who is also a past president of the powerful lobby group the Private Sector Organisation of Jamaica (PSOJ), said that while there were obvious problems, the focus should be placed on increasing education and awareness around the issues.
“Taxing sodas, fast food, or any other food groups will not necessarily change people’s eating habit or improve their health. This has been done in a number of countries and the obesity levels have not declined even as they increase the amount of tax. The question, therefore, is: How much tax will people now need to pay for their health to become better or are we going to tax them to the point where they can no longer buy products? I don’t think it is a practical approach to improving health.
Mark Myers is managing director of Restaurants of Jamaica, operator of KFC and Pizza Hut franchises.
“What is, however, a much better approach is for the ministry to have a plan which includes education, awareness, improving the quality of people’s lives so they can purchase better and more natural and fresh products. As a country we should be focusing more on agriculture and agro-processing and providing healthier alternatives, which is one of the things Wisynco is now doing,” Mahfood said.
For his part, Mark Myers, managing director of Restaurants of Jamaica, operators of popular fast food franchises KFC and Pizza Hut, said that outside of the perceived impacts that a sugar taxation policy could have for businesses, it could also ultimately impact consumers in a negative way.
“This could lead to a situation where things could get even more expensive and difficult for the consumers of these goods. We don’t need more taxes, what I think we need to focus on as a country is how tax dollars are deployed and if it is done effectively and efficiently,” he said to Sunday Finance.
