Kuala Lumpur, 24 October 2018 – The Galen Centre for Health & Social Policy today released a policy paper titled “Innovate for Health: Earmarking sin tax to support Malaysia’s NCD response”.
Commenting on the paper, Galen Centre Chief Executive Azrul Mohd Khalib said, “Treating cancer, diabetes and cardiovascular diseases has cost billions of ringgit annually, depleting public, private funds, and individual savings. Increasingly, more people and families are experiencing crippling financial hardship due to such chronic diseases. Costing billions in funds and productivity. Lives are cut short.”
“The current approach to tobacco and alcohol control in Malaysia, and how it relates to the prevention, control and treatment of non-communicable diseases (NCD) is arguably incomplete. Demands for increases in prices and excise duties of tobacco and alcohol should also be accompanied by insistence that the funds collected be earmarked and used for health.”
“Last year, an estimated RM 5.9 billion was collected from sin tax imposed on cigarettes, tobacco products and alcohol. From 2012 – 2017, RM3.46 billion and RM1.63 billion on average were collected yearly from these two products respectively. It is time for us to put future sin tax revenue to work on improving health outcomes, specifically to support NCD programmes.”
“Current interventions, including taxation, media campaigns, regulation of unhealthy products and targeted interventions reduce the chronic disease burden in this country, and hence the pressure on our healthcare system. But we need them to be fully funded and adequately supported in order for them to work.”
“Malaysia is currently not investing significantly in disease prevention. The National Strategic Plan For Non-Communicable Disease 2016-2025 identified inadequate additional and dedicated funding as being responsible for the limited progress under the previous NCD strategy.”
“We recommend, as a pilot programme, that the Government earmarks an initial 5 percent from the collected sin tax revenue to strengthen NCD health promotion and treatment, focusing initially on diabetes and cancer. This is an estimated RM 290 million annually which could act as additional or supplementary funding, necessary to support upscaling of innovative programmes or fund crucial lifesaving medicines and treatment. It will provide much needed financial support.”
“The intention is not to argue for more new taxes but rather earmark existing sin taxes already imposed on cigarettes, tobacco products and alcohol. These taxes are currently intended to reduce consumption and increase government revenue through indirect taxation. It is not directly earmarked and linked to healthcare funding.
“Earmarking sin tax for the prevention and treatment of these two diseases, is an innovation which could be a game changer on how we tackle NCDs.”
“However, it is important to ensure that earmarking results in actual increases in spending. They should not be illusory, and not be used to offset reductions or funding cuts to existing allocations under the national budget,” Azrul emphasised.
The World Health Organisation recommends earmarking for health programmes. At least 80 countries already do so and more than 30 utilise tobacco tax for this purpose.
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