No policy position yet on proposed sin tax to help fund NHI

The Nassau Guardian

Jasper Ward

The government has not yet formulated a policy position on a proposed sin tax on sugary drinks, Health Minister Dr. Duane Sands said yesterday.

Last year, the National Health Insurance Authority (NHIA) proposed such a tax to aid in funding the universal healthcare scheme in The Bahamas.

Sands has made clear that Cabinet has not agreed to such a tax.

When asked for an update on the possible tax yesterday, he said, “We have had ongoing discussions with our health partners, our local and regional health partners. We have had discussions in principle with the Ministry of Finance, but no final policy decisions have been made.

“Certainly, the Ministry of Health has been discussing the impact of a sin tax on the reduction in sugar consumption as a positive.

“A tax perhaps to reduce alcohol and tobacco consumption also would be considered beneficial in terms of health outcomes, but that does not translate into any specific policy or fiscal decisions that have been made.”

Sands said “there is no specific timeline” for consultations on the tax.

The NHIA has proposed that this tax would take effect in July 2019. It would specifically fund NHI’s wellness program, to be launched at the onset of the new tax.

In February 2018, Progressive Liberal Party (PLP) Deputy Leader Chester Cooper suggested that revenue from such a tax, if imposed within reason, would be insufficient to sustain NHI.

“If the honorable minister is referring to additional taxes on alcohol and tobacco, once he acquaints himself of the taxes that already exist on these products and services, as the case might be, he will determine that there is already a high level of taxes on them, and there would be a question in my mind as to whether the new amounts that can be reasonably gained as a result of increasing these taxes – to a reasonable level – would be enough to support NHI or even to sustain the existing healthcare infrastructure,” Cooper said.

A sin tax was among the proposed recommendations by Costa Rican advisors to the Christie administration, Sanigest Internacional. But ultimately, the former administration did not leverage additional fees when the program was launched.