Tax Relief

Kagwe in tax relief talks for oxygen firms about virus flood

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Kagwe in tax relief talks for oxygen companies about virus flood

Tuesday March 30th 2021

Secretary of the Mutahi Kagwe Health Cabinet. FILE PHOTO | NMG

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BY CONSTANT MUNDA
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Summary

  • The Ministry of Health has now started talks with the Treasury Department about a proposal to offer tax breaks to medical gas manufacturers as oxygen supplies in hospitals are snappy due to an increase in Covid-19 infections.
  • Health Minister Mutahi Kagwe said oxygen demand almost exceeded supply after hospitalization due to complications related to Covid and increased by more than half in two weeks.

The Ministry of Health has now started talks with the Treasury Department about a proposal to offer tax breaks to medical gas manufacturers as oxygen supplies in hospitals are snappy due to an increase in Covid-19 infections.

Health Minister Mutahi Kagwe said oxygen demand exceeded supplies by more than half in two weeks after hospitalization for Covid-related complications, forcing authorities to restrict entry and exit into the Nairobi metropolitan area and Nakuru county.

The oxygen demand for emergency medical care related to Covid has more than doubled from 410 tons last year and 560 tons in January to about 880 tons, due to increased third wave infections, which averaged 20 percent of tests over the past few weeks made out.

“Due to the urgent nature of the oxygen demand, we will be working with the Treasury Department to see if we can increase the supply of oxygen bottles by reducing some taxes. But this is a discussion that we need to get together with the industry, ”said Kagwe.

“The current situation is that the (gas producing) industry is completely overloaded. If we go any further, steps must be taken immediately. “

Adequate oxygen supply is required to treat Covid-19 patients with breathing difficulties.

In the third wave of Covid-19 in Kenya, hospital admissions rose 52 percent in two weeks through Friday.

There are currently 121 patients in intensive care units, 32 of them with ventilation support and 82 with additional oxygen.

The positive test rate was 22 percent last week, up from 2 percent in January. That month, an average of seven Kenyans died of Covid-19 a day, up from three a day in January and February.

Reduced taxes, which require cabinet and parliament approval, are part of the strategy the ministry is considering to stimulate investment in the medical gas industry.

Some of the country’s 75 or so oxygen plants have stalled due to challenges related to the supply of spare parts. The ministry will commission the 47 districts and industry to develop common standards for oxygen systems in the future.

This was done under the pretext of leading gas manufacturers, BOC Gases and Gas Africa, to hospitals and households who clung to unused oxygen cylinders in order to dispose of them immediately.

“It’s a crisis and we need all the help we can get from the patients and from the hospitals that hold the (oxygen gas) tanks. If you think hospitals provide non-Covid or non-emergency care at home or in hospitals, please send them back to us, ”said Marion Mwangi, Managing Director of BOC.

In the meantime, the ministry has asked hospitals to speed up the installation of oxygen line infrastructure on beds rather than in the current situation where most hospitals “use the bottles per patient”.

“[This is] inefficient because a cylinder can be used by a wide range of people once the oxygen has been fed to the beds, ”the minister said.

The ministry continues to engage the 47 counties and industry to develop common standards for oxygen systems in the future to address challenges related to the supply of spare parts and the quality of the oxygen produced.

“We can’t get replacement parts for some of the plants that were built a few years ago, essentially because they come from suspicious sources,” Kagwe said.

“For example, the oxygen system in the Kenya National Hospital (KNH) was supplied by what was then the Czech Slovak Republic. The country itself does not exist (today), and how can you even start repairing the system at KNH? “

Gas Africa executive director Raj Ram said the industry had slowed the production of industrial gas, mainly used in food processing and horticulture, in favor of medical gas.

“We have also sent out circulars to industries in which we will only be selling medical oxygen bottles in the foreseeable future. We deliver through the night. In some cases, orders have increased six-fold, ”said Ram.

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