Zimbabwe Turns To "Sin Taxes" To Fund Health Sector After U.S. Cuts Aid
Finance and Economic Development Minister Mthuli Ncube has said the government will rely on locally generated revenue to sustain the health sector following the withdrawal of key external funding, reported The Herald.
Recently, the United States suspended funding for vital health programs, including HIV interventions under the President’s Emergency Plan for AIDS Relief (PEPFAR).
PEPFAR, the leading funder of HIV programs, had committed US$210 million to Zimbabwe in 2024 and an additional US$200 million for the period from October 2024 to September 2025.
To offset this loss, Ncube said that the government plans to use “sin taxes”—levies on alcohol, cigarettes, fast food, and sugary beverages—to support the health sector. He said:
We have quite a portfolio of various taxes that will be applied towards the budget needs of the health sector.
Of course, the actions taken by certain donors to withdraw funding put pressure on us, but with the resources raised from these sin taxes, we believe we can address some of the challenges.
This is a continuous budget implementation process. Where there is a need, we provide funding. I am pleased that we have a dedicated revenue stream from sin taxes that we can apply specifically to the health sector.
It remains unclear how much revenue is generated through sin taxes and the AIDS Levy, and whether these funds can fill the gap left by the suspension of international aid, especially given Zimbabwe’s economic challenges and high disease burden.
Shortly after taking office in January, U.S. President Donald Trump withdrew the U.S. from the World Health Organization (WHO) and suspended foreign assistance for 90 days as part of a shift in foreign aid policy.
It is uncertain what will happen after the 90 days, including whether U.S. funding will be halted or resumed, and under what conditions.
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