Call for mining companies in Sierra Leone to pay more tax
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Mining companies which profit from natural resources in one of the world’s poorest countries should pay more tax to invest in health services that could prevent the avoidable loss of huge numbers of lives.
This alert comes today in a new report from a British charity working in Ebola-hit Sierra Leone, published as the House of Lords debates the disease.
It warns that many thousands will still fall victim to needless deaths because of the weak health system in Sierra Leone, which could be better funded by moves such as cutting revenue exemptions to the extractives industry.
Almost 4,000 people have died from the recent Ebola outbreak in Sierra Leone, which has the worst rates of maternal mortality and life expectancy, and among the highest rates of infant deaths.
Estimates suggest the nation has lost £127 million a year in recent times due to tax incentives, over three times its 2015 health budget.
But, according to the report, launched by Health Poverty Action, reducing incentives could bring £60 million revenue in the next few years.
The figures are based on the five largest mining companies operating in Sierra Leone last year.
These were Sierrra Rutile, Octea Mining, Sierra Minerals Holding Limited, African Minerals and London Mining, though the latter two are now owned by Shandong Iron and Steel, amid a decline in the iron ore market.
Despite Sierra Leone’s scheme that grants mothers and young children free healthcare, other citizens must still pay upfront fees, which make provision a luxury beyond their reach, or force them into poverty.
At the same time, the Free Healthcare Initiative for mothers and infants is dependent on donor funding, when far more sustainable sources could include higher tax revenues from mining companies.
Besides shrinking current tax breaks, the charity believes donor countries that benefit from health workers’ migration should pay compensation.
It reveals how present Sierra Leone subsidies to UK health services may total as much as £22.4 million.
The sum represents the cost Britain would have faced to train the doctors and nurses from the West African state who are now in the UK.
Despite Sierra Leone having only 136 doctors in 2010, another 27 trained in the country are now in Britain.
And though Sierra Leone had just 1,017 nurses in 2010, the profession’s UK body lists 103 trained earlier there.
The report cites a World Health Organisation threshold of 230 doctors, nurses and midwives per 10,000 people as the minimal level for essential maternal and child health services.
Yet Sierra Leone has faced the recent Ebola crisis with just one doctor for every 45, 625 people.
The charity urges Sierra Leone’s donors to continue aid for a stronger health system, to help build its tax and finance capacity, and to provide financial compensation where they have benefited from health worker migration.
Health Poverty Action also highlights that in addition to the money lost through tax breaks, illicit capital flight – unrecorded financial outflows, some from revenue evasion and avoidance – has cost the state about £45 million a year over the past decade.
This requires the international community to address the issue.
Dr Tadesse Kassaye Woldetsadik, the charity’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.”
Health Poverty Action senior policy advisor, Natalie Sharples, said: “As well as looking at reducing tax breaks, robust action is also needed at the global level to crack down on revenue lost through tax dodging and other illicit financial flows. Britain, and all participants in next month’s Financing for Development conference, must take firm action to stop the draining of resources from countries such as Sierra Leone.”
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