With global funding for HIV/AIDS on the decline, Zimbabwe's innovative AIDS levy - a 3 percent tax on income - has become a promising source of funding for the country, with a dramatic increase in revenue collected in the past two years.
The levy was introduced in 1999 to compensate for declining donor support, but low salaries and the poor performance of industry meant not enough money had been collected - until recently. In its 2010 report on Zimbabwe's progress in implementing the Declaration of Commitment on HIV/AIDS, adopted by the General Assembly in 2001, the government admitted the levy was "essentially non-existent in 2007-2008 due to economic challenges the country was facing".
According to the organization’s recently published audited financial statements for the year ending 31 December 2010, a total of US$20.5 million was collected in 2010 against $5.7 million the previous year.
Murombedzi Kuchera, chairman of the National AIDS Council Board, attributed the increase to improved revenue flows owing to improved political and economic stability in the country, which has created more jobs in the formal sector and improved tax remittances. Zimbabwe’s economy has witnessed steady growth following the formation of the coalition government of Prime Minister Morgan Tsvangirai and President Robert Mugabe in 2009.
“The 259 percent increase in the collections was mainly through the increased capacity utilization by industry and commerce,” Kuchera said in his statement.
Although the revenue figures for 2011 have not yet been audited, the National AIDS Council estimates it collected about $25 million. However, the exact figure will be confirmed after the audit by the Comptroller and Auditor-General, which audits all the finances of parastatals, at the end of 2012.
“The AIDS Levy is certainly proving to be a good source of funding for the country’s HIV and AIDS response,” National AIDS Council information and communication officer Orirando Manwere told IRIN/PlusNews.
“Our projections are that for 2012, with the growing economic stability in the country, we will collect more than $30 million through the funds and even more in 2013. However, this is all largely dependent on economic growth," he added.
Although 347,000 people are on antiretroviral (ARV) treatment in the country, another 600,000 need the medication. The treatment gap widened after Zimbabwe adopted the new World Health Organization guidelines that recommend starting treatment earlier.
The AIDS levy contributed almost a quarter of the money to purchase ARVs, while 76 percent of the treatment programme was financed by international donors such as the Global Fund to fight AIDS, Tuberculosis and Malaria and the UK Department for International Development.
But the country - one of the hardest hit by HIV/AIDS - still needs a lot more funding to cover the "worrying" treatment gap, cautioned HIV/AIDS activist Stanley Takaona.
“Many people are dying because they cannot access treatment. Zimbabweans are playing their part to take care of their own by contributing to the AIDS Levy but this is not enough. Government must allocate funds from the fiscus to fund the HIV/AIDS response; it’s their responsibility,” he said.
Kumbirai Mafunda, spokesperson for the Zimbabwe Lawyers for Human Rights, warned against complacency. “Yes, the increase in the AIDS Levy is remarkable but we all know it’s not enough... now government has to increase budget allocations to the health sector."