Sharing knowhow and joining forces towards Health for All
Healthy Revenues: How the extractives industry can support Universal Health Coverage in Sierra Leone

Tax, the extractives industry and health in Sierra Leone

Tax, the extractives industry and health in Sierra Leone

Health Poverty Action has launched a report highlighting how making extractive companies in Sierra Leone pay more tax could provide vital support to the health system.

Entitled ‘Healthy Revenues: How the extractives industry can support Universal Health Coverage in Sierra Leone’, the report explains how reducing tax breaks given to extractives companies, could bring vital funds to pay for healthcare, in a country where many still die needlessly.

The research based on the five largest mining companies operating in Sierra Leone last year found reducing some of the tax breaks could bring in an extra £60 million a year. A recent drop in iron ore prices means the final figure is unknown, but the report argues more revenue from the industry has the potential to transform healthcare.

Estimates suggest Sierra Leone has lost £127 million a year in recent times due to tax incentives – which is three times its 2015 health budget.

As a country with some of the worst health indicators in the world, and currently ranking 183 of 187 countries on the Human Development Index, generating revenue through the extractive industries could help to transform Sierra Leone’s ability to deliver Universal Health Care.

It is a crucial time for Sierra Leone’s health system as it continues to fight the Ebola outbreak first confirmed last year. Almost 4,000 people have now died in Sierra Leone from the outbreak, whilst many others have died of unrelated conditions and diseases such as malaria due to public health work grinding to a halt and the health system teetering on the brink of collapse.

Speaking about the report, Dr Tadesse Kassaye Woldetsadik, Health Poverty Action’s head of Africa programmes, said:

“People are being denied their right to health as a result of Sierra Leone’s weak health system. Tax funding is vital to finance health care. We urge Sierra Leone, and the UK as one of its main donors, to take a close look at how greater revenue from the extractives industry could be used to deliver a better and more equitable health system for the country’s people.”

In a separate tax related issue, Sierra Leone also suffers from illicit capital flight – unrecorded financial outflows that leave the country, some a result of tax avoidance and evasion. This figure is more than the country’s 2015 health budget.

The report coincides with a debate taking place in the House of Lords today on the Ebola crisis in West Africa and comes just before the Financing for Development summit in Addis Ababa in which world leaders will put together an agreement on how to finance development.

The report urges the government of Sierra Leone to review the tax breaks it give to the extractives industry. It also calls for urgent action to reform the global tax system.

Document Actions