FG to channel ‘lifestyle taxes’ into healthcare funding — Oyedele

Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, revealed plans to develop a draft policy that would allocate revenues from excise taxes on alcohol, tobacco, and sugar-sweetened beverages directly to healthcare financing. This initiative is part of broader efforts to secure sustainable funding for Nigeria’s struggling health sector.

Speaking on Thursday at the National Dialogue on Health Financing in Abuja, Oyedele explained that his committee, tasked with reforming Nigeria’s tax system, is preparing the policy for submission to the Minister of Health and Social Welfare.

He stated, “Ultimately, health is funded by taxpayers. We must acknowledge this reality. While people often talk about healthcare being free in other countries, it is ultimately taxpayers who foot the bill. The government must establish effective policies to ensure efficiency.”

Oyedele referred to these excise taxes—commonly labelled ‘sin taxes’—as an accessible and significant source of revenue that could greatly enhance healthcare delivery, provided the funds are ring-fenced rather than merged into the Federation Account and divided among various government tiers.

He suggested rebranding them as ‘lifestyle taxes’ and insisted that the revenue generated should be strictly earmarked for health-related outcomes. He further proposed adopting a similar approach for income derived from carbon taxes on environmentally damaging activities, such as gas flaring.

Additionally, Oyedele highlighted ongoing reforms under new tax legislation due to take effect in January, including the zero-rating of medical equipment and pharmaceuticals for VAT purposes. This measure aims to lower healthcare costs and expand access to essential medical supplies.

His remarks come as the federal government pursues fresh strategies to reinforce healthcare financing, confronting mounting fiscal constraints and a decline in donor assistance.