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Private sector speaks out on national health insurance plan

By Vision Reporter

Added 8th March 2009 03:00 AM

THE private sector wants the Government to consider taxation and expenditure programmes that will boost consumption and investment as the global economic downturn threatens to reverse the gains that have been registered in the economy.

THE private sector wants the Government to consider taxation and expenditure programmes that will boost consumption and investment as the global economic downturn threatens to reverse the gains that have been registered in the economy.

By Sylvia Juuko

THE private sector wants the Government to consider taxation and expenditure programmes that will boost consumption and investment as the global economic downturn threatens to reverse the gains that have been registered in the economy.

The business community expressed concern over the introduction of policies like the proposed National Health Insurance scheme, arguing that they would increase the tax burden on the formal sector.

“The proposed scheme cannot work. It will not only add to the cost of doing business, but is also a recipe for fuelling corruption because it will avail huge amounts of money to a small group of people,” said Dr. Ian Clarke, the proprietor of International Hospital Kampala. The business community was discussing proposals to the Government during a pre-budget forum organized by PricewaterhouseCoopers at the Imperial Royale Hotel in Kampala last week.

The private sector is currently weighed down by the ballooning cost of doing business arising from inflation, fluctuating currency, high fuel and energy costs, spike in local taxes, high lending rates and non-tariff barriers hindering regional trade. As a result, most have scaled down operations by 50%, while others have relocated to other countries.

They proposed a budget strategy that seeks to improve Uganda’s regional competitiveness to take advantage of the increased demand for Uganda’s produce to mitigate the impact of the global downturn.

The global recession has hit demand for local exports and depressed prices as has been reflected in reduction in export earnings. The business community asked the Government to consider expediting the implementation of the road projects that received a budgetary allocation of sh1.1 trillion last year.

They added that an option that the Government should consider was launching of a bond to finance infrastructure projects. They noted that while mobilisation of domestic revenue was more critical in the face of declining collections, any increase in tax rates in the current environment would be counterproductive. They instead called for the widening of the tax base.

The investors suggested that the Government should engage with the oil companies to remove the bottlenecks so as to create a favourable price for fuel and its products. Domestic debt was another area of concern for the business community because it tied up their capital, crippling their operations. They also recommended the liberalisation of pension sector to facilitate growth of capital markets.

The business community also asked for incentives to boost investments, especially in the agrobusiness. The investors also want the Government to prioritise spending to cut down on ballooning expenditure, which they noted fuelled a huge fiscal deficit that put pressure on interest rates.

Uganda’s plan to adopt a compulsory National Health Insurance scheme is still facing opposition even after its architects say it will make health care affordable to the majority of Ugandans, who live below the poverty line.

The health care financing scheme, which has recently faced resistance, especially from workers and other trade unions, will enroll people in formal employment in a compulsory monetary contribution who, in turn, are entitled to health care benefits from gazetted health centres.

The scheme is expected to be operational from July 2009. Dr. Francis Runumi, the commissioner for planning in the health ministry, said while the plan was to have universal coverage of health care for all in the next 15 years, Uganda had been left behind in debates and skepticisms.

“We are pushing to have the scheme in place. Health insurance with a legal mandate towards universal coverage is a possibility here,” Runumi said.

“With increasing cases of new emerging diseases, health experts say having a health insurance scheme in place will ensure that many people are able to afford the cost of health care delivery.

“Because of the emerging and re-emerging diseases like HIV/AIDS, malaria, diabetes hypertension and other diseases cause by lifestyle changes, the government alone cannot manage and thus needs an alternative source of financing,” explained Dr. Richard Alia, a health specialist with the World Bank in Kampala.

Private sector speaks out on national health insurance plan

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