HEALTH OUTCOMES AND VALUE ADDED TAX (VAT) IN UNITED ARAB EMIRATES (UAE)

 

UAE recently hosted a series of international forums on Non-communicable diseases (NCD’s). The Third Global NCD (Non-Communicable Diseases) Alliance Forum 2020 was under the theme of "Bridging the Gaps" was inaugurated by His Highness Dr. Sheikh Sultan Bin Mohammad Al Qasimi, UAE Supreme Council Member and Ruler of Sharjah. Sheikh Sultan previously highlighted the extreme need to hold an international gathering of like-minded individuals from across the globe, saying that NCDs have become a burden to every country[1]. His Highness stressed the need to combine efforts that protect people’s health and wellbeing by promoting healthy habits and promoting campaigns against bad lifestyle choices. Jose Luis Castro, President of the NCD Alliance, in his speech drew attention to the crucial role of civil society to stimulate equitable progress by 2025 and 2030: “Here in Sharjah, we took critical steps as a movement to identify how we can accelerate the implementation of life-saving and transformative policies; and how to strengthen our movement to deliver change”[2]

 

Chronic diseases require long term, costly and specialist treatment. 

Combating NCDs remains a major economic challenge to countries celebrating an increase in life expectancy rates as a result of improved economic status, but are bemoaning increases in the so-called lifestyle diseases. Approximately 300 million people in the world have diabetes, with the number predicted to rise above 435 million by the year 2030 (IDF, 2013) In the Gulf Corporation Council region (GCC) investments made in healthcare since the first oil boom has started paying dividends. GCC nationals are enjoying much longer lives where average life expectancy across the region has increased from 60 years in the late '70s to 75 years in 2012 (IDF, 2013; Hu, 2011). However, the same GCC nationals are likely to suffer from health complications where the Western lifestyle has replaced the traditional lives and traditional eating habits. 

Urbanization and rising personal wealth, for example, have prompted many a local population to reject active outside activities and instead embraced fondness of processed foods and detestation of physical exercises. Chronic diseases and obesity-related illness, previously uncommon in this region are on the rise. The US management consultant McKinsey & Company forecasts that the total cost of healthcare delivery in the Gulf will increase to nearly $60bn by 2025, up from $12bn in 2007 (Rahim, Sibai, Khader, et al, 2014).

 

In the United Arab Emirates (UAE) - a major economic powerhouse in the Gulf region- recent data suggest that 20% of the population has been diagnosed with diabetes and another 18% are at risk of developing it. Diabetes rates in UAE and the Gulf region are forecast to triple by 2030, from 1.5 million cases in 2000 to 4 million in 2030 representing the second-highest prevalence rates in the world (Ibid). The health cost of diabetes management is likely to rise to 43 billion dollars imposing a substantial financial burden not only on the UAE economy but also on many households in the country. The forum (in one of its series) concluded by observing that civil society has the mandate of working with governments to enact policies that promote healthy lifestyles for example increased physical activities and improved diets.  

 

 The World Health Organization estimated deaths from NCDs in the UAE to be 65 per cent out of 9,700 deaths. In 2017, the Ministry of Finance in the UAE introduced fiscal policies (value-added taxes) on selected goods and services. Such taxes are imposed for the primary purpose of achieving better health outcomes for the entire population. It is estimated that the UAE could raise a revenue of about 1.6 per cent of GDP from VAT in the first year following its introduction[3]. The proceeds of the food-related taxes could be used to fund or subsidize health programs and health insurance, diversify the government’s health spending away from the government’s direct payout. It is envisaged that taxes on sugar-related items like sodas and tobacco products will reduce consumption of sodas and tobacco products, eventually lowering levels of diabetes and diseases related to tobacco use for example lung cancer.  

 

Fast forward to February of 2020, the UAE government through the Ministry of Health, reduced the prices of 573 medicines, between 2 per cent and 74 per cent- the largest in quantity and quality for chronic diseases[4]. It is expected the reduced prices of medicines will ease the financial burden on patients and contribute to their access to the world's best and most modern drugs at affordable prices, especially those with chronic diseases. 

The 2020 forum was organized by the NCD Alliance in partnership with the local host organization, Friends of Cancer Patients. Nearly 400 delegates from 80 countries attended the Forum from 9-11 February in Sharjah, UAE. Delegates included representatives from 53 national and regional NCD alliances, civil society from cross-cutting areas relating to NCDs, youth leaders, academia, and people living with NCDs, NCD Alliance supporters, global stakeholders, and recognized champions. Over the course of three days, the delegates participated in 5 plenaries and 18 workshops, discussing NCD advocacy, building synergies, and sharing tools and strategies to further the NCD response[5].

 

REFERENCES

Hu, F.B. (2011). Globalization of diabetes: the role of diet, lifestyle, and genes. Diabetes Care,

34:1249–1257

 

International Diabetes Federation (2013). Diabetes Atlas. 6th ed. International Diabetes Federation. 

 

Rahim, H.F., Sibai, A., Khader, Y., Hwalla, N., Fadhil, I., Alsiyabi, H., Mataria, A., Mendis, S., Mokdad, A.H., & Husseini, A. (2014). Non-communicable diseases in the Arab world. The Lancet; 383(9914):356-67.

 

World Health Organization (2008). Nine voluntary global targets with a framework of 25 indicators to curtail the escalation of the chronic disease. 

 

 

 

[1] Gulf News Feb 2020

[2] Third NCD Alliance Sharjah 2020

[3] Shailesh Jha, an economist at ADCB Gulf News, June 2017

[4] Ministry of Health bulletin Gulf News Feb 2020.

[5] NCD Alliance report 2020

Main campus

Open on location Google Map