Scrap Import Duty and VAT on Condoms…Partners Plead With Gvt, As Zimbabwe Records 15 Million Condom deficit

RELIANCE on donor funding for the National Condom program, coupled with a restrictive tax regime has resulted in Zimbabwe failing to meet its condom obligation of 173 million condoms per year, a development that could reverse progress made so far in the HIV response, HealthTimes has learnt.

By Michael Gwarisa

Zimbabwe’s national condom program comprise of public sector condoms, private sector condoms and Social Marketing condoms. However, increased donor fatigue has seen major donors such as the USAID and PEPFAR cutting their funding towards the procurement of public sector and social sector condoms in Zimbabwe from US$4 million in 2019 to US$3 million in 2020.

This has heavily dealt a major blow to the country’s condom program with indications that only 122 million condoms are being distributed from the 173 million condoms required to be able to reach 90 percent coverage of high risk sexual acts. This leaves the country with condom gap of 15 million. The punitive import duty and Value Added Tax (VAX) on condoms has also exacerbated the country’s condom woes.

In an interview on the side-lines of a High Level Advocacy Meeting to Discuss Bottlenecks Affecting the Condom Market in Zimbabwe, Dr Owen Mugurungi, the Director AIDS and TB Unit in the Ministry of Health and Child Care (MoHCC) appealed to the Ministry of finance to consider scrapping VAT and Import duty on condoms.

We had a meeting today with the members of parliament so that we can give an insight on the challenges and barriers that we face in terms of importation of condoms in this country. Remember, condoms are a very critical component in our HIV prevention. They are highly effective if used correctly and consistently.

“One of the issues that we have faced over the years is issues around import duty and VAT. With dwindling donor support, the country really needs to step up and start importing its own condoms and the private sector has a role to play. Therefore, we need to make sure that we reduce the duties and VAT that is payable so that at the end of the day, the price is affordable for the end user,” said Dr Mugurungi.

The High level meeting was also attended by members of parliament from various portfolio and thematic committees of parliament.

“I am glad that members of Parliament and senate were present in their numbers and we  made recommendations that they move a motion in Parliament to do away with the VAT and import duty on condoms. Countries around us such as Zambia, Malawi and other regional countries have either zero import duty and very little VAT that is charged when condoms are imported.”

Sexually Transmitted Infections (STIs) Coordinator in the Ministry of Health and Child Care, Anna Machiha said the high cost of private sector and social marketing condoms has exerted pressure on the public sector or free condoms that are distributed for free, in the process depriving those who can’t afford access to services.

“Public sector condoms occupy the biggest market share, about 77 percent of the market, whilst social marketing occupies about 22 percent and 1 percent is occupied by the private sector and this is an anomaly. Why do I say so? There are people who are accessing free condoms or public sector condoms who can actually be moved to the private sector or social market and there are some who in the social market who should be in the private market.

“This is work that we have been doing over the past two years to ensure that we look at the issues in our market and try to segment and make sure that we target condoms accordingly, living the free condoms for people who cannot afford to pay and then we move the rest to where they belong,” said Machiha.

Meanwhile, Hadwin Sithole, the National Sales and Distribution Manager at Population Solutions Health (PSH) said Zimbabwe had an unhealthy and unsustainable condom market that hugely relies on donated commodities.

“The two biggest barriers or bottlenecks that are in the market include Import Duty and VAT. These are stifling the growth of the commercial sector. VAT and duty on condoms increase the lending cost. They increase the price that condoms get into the country with. This then limits the volumes of the condoms for the private sector that come into the country. This is restricting the growth of the commercial sector,” said Sithole.

He added some retail outlets prefer not selling condoms because they are not profitable products and are expensive beyond the reach of many due to the cost build up and bottlenecks around importation of condoms. Sithole added that the twin evils, Import duty and VAT combined have chased away commercials sector players and left the country with only about three private sector condom bands namely Carex, Durex and Fantasy therefore liming users’ choice.

However, Kenya has 41 commercial sector brands mainly because their Import duty is 2 percent but they don’t charge VAT, Zambia does not charge any VAT on condoms, Nigeria charges 5 percent VAT.

Acting Chairperson for the Parliamentary Portfolio on Health, Honorable Tapera Saizi said they would move a motion in Parliament and ensure government prioritizes condoms availability as they are an essential tool in HIV prevention. 

“As members of Parliament, we need to strengthen our oversight role by demanding quarterly reports from the ministries that we do oversight because we can’t wait for them to give us information. Information is supposed to be requested for because that is part of our duty as we do the oversight role,” said Hon Saizi.

 

 

 

 

 

 

 

 

 

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