FG Moves to Channel “Lifestyle Taxes” into Healthcare Funding

Nigeria may soon dedicate taxes from alcohol, tobacco, and sugary drinks directly to healthcare, as part of a new draft policy.

Taiwo Oyedele, chairman of the Presidential Fiscal Policy and Tax Reforms Committee, revealed the plan during a national dialogue on health financing in Abuja on Thursday.

“At the end of the day, health is funded by taxpayers. We must recognise that. People often talk about health being free abroad, but it is taxpayers who pay for it. Government must put in place the right policies to ensure efficiency,” Oyedele said.

Oyedele explained that the committee, set up to reform Nigeria’s tax system, is already preparing the draft policy for submission to the Minister of Health and Social Welfare.

He argued that excise duties from alcohol, tobacco, and sugar-sweetened beverages should not disappear into the federation account, but be ring-fenced for healthcare.

“I don’t even think we should call it sin tax, maybe lifestyle tax. Whatever we call it, those revenues should be dedicated to health outcomes. Right now, they go into the federation account and are shared. That, for me, is a low-hanging fruit,” he said.

The tax expert also pushed for Nigeria to build a transparent framework to ensure that existing revenues are channelled directly to health outcomes.

Carbon Tax and Other Reforms

Oyedele further proposed a carbon tax on polluting activities such as gas flaring, with proceeds earmarked for healthcare because of their environmental and health costs.

“It’s really about people. If there’s no human being on this planet, nobody would care about the environment. So if we do carbon tax, why don’t we dedicate part of it to health financing?” he asked.

He added that new tax reforms taking effect in January would zero-rate medical equipment and drugs for VAT purposes, reducing costs and widening access to health services.

Oyedele’s remarks come as government struggles to boost health financing amid shrinking donor support and rising fiscal pressures.

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