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PSN kicks as Senate plans 1% yearly tax on companies to fund tertiary healthcare


President of the Pharmaceutical Society of Nigeria (PSN), Mazi Sam Ohuabunwa

*Says multiple taxation on private businesses driving investments in pharmaceutical industry away from Nigeria to Ghana

President, Pharmaceutical Society of Nigeria (PSN), Mazi Sam Ohuabunwa, has warned the Federal Government against multiple taxation on private businesses as it may end in driving investment away from the country to neighbouring Ghana.

Ohuabunwa spoke at a public hearing on five bills organised by the Senate Committee on Health, chaired by Senator Ibrahim Oloriegbe.

The five bills are: Advanced Healthcare Development Fund (Est. Etc.) Bill 2020 (SB. 371); Federal Tertiary Teaching Hospitals Development Tax Fund (Est., Etc.) Bill, 2020 (SB. 136); Medical and Dental Council of Nigeria (Repeal and Re-enactment) Bill, 2020 (SB. 480); Federal University of Health Sciences, Oturkpo, Benue State (Est., Etc.) Bill, 2020 (SB. 216); and National Maternal and Perinatal Deaths Surveillance (EST., Etc.) Bill, 2020 (SB. 518).


Chairman of the Senate Committee on Health, Ibrahim Oloriegbe, said the Federal Tertiary Teaching Hospitals Development Tax Fund is for rehabilitation, restoration, improvement and consolidation of tertiary healthcare delivery in Nigeria in order to restore confidence in the health sector.

Oloriegbe said: “Under the bill, petroleum companies shall pay one per cent of total barrel of crude oil they produce yearly as tax, mobile phone services providers shall pay one per cent of airtime and data they sell yearly as tax, cement companies shall pay one per cent of their yearly profit tax, beverages and breweries companies shall pay one per cent of their yearly profit as tax.

Others are painting chemical manufacturing companies shall pay one per cent of yearly profit as tax and tobacco companies shall pay one per cent of their yearly profit as tax.”

But Ohaubunwa said it is true that funds are needed to support health, which they are in agreement with. However, he said it should not be at the expense of the private sector.

The pharmacist said: “The private companies pay taxes to government and the government should use that tax to develop health sector, education and whatever

“The tendency and pendency to keep taxing, today is one per cent, telecoms one per cent, breweries one per cent is not the best global practice and this country wants to be operating at that best global practice.


“More importantly, we are underdeveloped and we need investments, for investment to flow, we must make the environment attractive. So, to be taxing companies, every law you add one per cent, another day it may be pharmaceutical companies and we are reeling under poor performance.

“So, I am in agreement that we need funding for healthcare. I am a healthcare professional, I know it is not properly funded, we should be creative.”

Ohuabunwa added: “One of the things we should be suggesting is to reduce bureaucracy, cost of running government, cost of running National Assembly, cost of running all the different sectors. We are spending so much on bureaucracy, over 70 per cent on recurrent expenditure whereby we are leaving less than 30 per cent for capital.

“Instead of facing the main issue, we are running around taxing companies, the companies will run to Ghana and we would have nobody to tax again.”

On the bill for the Federal University of Sciences in Oturkpo, he said: “If you ask me, we don’t need to set up any more universities until we are sure of proper funding of the ones we have.

“We have institutions littered all over the places that is what is consuming the recurrent expenditure in the budget of the country. Let us first be sure that the ones we have are working at optimum level before starting a new one. This perchance to start, start, will proliferate the place and none of them is performing well.

“Government should take one or two it can do and make it a model, then invite private sector to use that model to build their own.


“Public sector putting money everywhere is causing us pain. Not to build more now, you have one or two make them functional, operate at global best standard. It can be yielding income, attract other investors, attract endowment and they can expand.

“But to build and rebuild for every city, every village you put an university. If we have the money no problems, but we don’t have the money to fix the existing ones to best standard, so why build new ones?”

On the shortage of health personnel in the country, Ohuabunwa said he is concerned, but expressed the hope something is done about some young doctors who finished school for two years and they don’t have employment and young pharmacists finished school for two years who don’t even have a place to do internship.

“When they have jobs, they have jobs that they are paid peanuts, starvation wage. You are wasting your money, training people for the other markets, you train them and they hire them, then what is your benefit?

“Let us be sure that we are training the number we can employ. Not to be training people that will become frustrated because they have no place to work; nobody is helping them, there is negative feedback on that…”

Oloriegbe said the Advanced Health Development Fund Bill seeks to provide funding for health development, infrastructure, equipment, supply and essential technology.

Oloriegbe said the objective is to evaluate and re-engineer the advance tertiary medical architecture with a view to bringing it maximally up to speed with available practice anywhere in the world. He said the bill is to provide new and maintain/improved existing infrastructure essential to healthcare service delivery.


He said it is also to carry out trail-blazing medical research and publications.
“It will provide for training and retraining of clinical staff across the country. Provide a robust structure that has the capacity to proactively deal with emergent health emergencies and stem the loss of multi millions yearly from Nigerians who engage in medical tourism abroad that only benefits other countries across the world,” Oloriegbe said.

Senate President, Ahmed Lawan in his speech said public hearings are always useful for their ability to improve information, towards comprehensive Senate deliberations.

“For these Bills, they are significant for our wellbeing, and to the development and sustenance of our health management and infrastructure.

“While the Bill on Advance Healthcare Development Fund and Federal Tertiary Teaching Hospital Development Tax Fund has to do with resource generation and application, those on Medical and Dental Council of Nigeria and Federal University of Health Services relate to institutional empowerment and development, consistent with new realities.


“The Bill on National Maternal and Perinatal Deaths Surveillance concerns the quest to limit avoidable deaths, amongst a crucial section of our population.

“The implication of the themes of the Bills is a focus on our health management system, from the perspective of funding, to the support of institutions, aside the need to create additional learning and teaching structures.

“The Senate has welcomed the proposals through accepting them for deliberations, but we are now at the stage of hearing from stakeholders and the public.

“This stage provides an opportunity for further understanding, in line with the philosophy of inclusion envisaged in the legislative process. It is accordingly an opportunity for participants to be open minded, and forthcoming in their submissions. This will assist in the development of the final report to the Senate, and then enrich debate.”


In this article:
Mazi Sam OhuabunwaPSN
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