Remove taxes on medicines to strengthen NHIS - Pharmacy Chamber
The reduction and subsequent removal of taxes on imported medicines in the country will lead to a huge reduction in the amount of money that the government pays for medicines under the National Health Insurance Scheme, according to the Chamber of Pharmacy Ghana.
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The Chairman of the Chamber of Pharmacy Ghana, Mr Harrison K Abutiate, said in 2015, the NHIS saw over 29 million visitations, with the government paying over GH₵1 billion to NHIS service providers.
“If on the average half of these card holders got medicines which were tax free, the medicine bill would have been halved,” he stated.
He said imported drugs attracted a 17.5 per cent Value Added Tax (VAT) which increased medicine’s bill with over 52.5 per cent, not to mention other additional taxes such as ECOWAS levy, export development levy, processing charges, special import levy, development fund, etc
He pointed out that all these taxes and fees plus transport charges, storage, wholesaler/retailers mark up and bank interest rates add up to make the final sales price to the government and the patient.
He said the total effect of all those taxes was that government who was the major buyer of imported drugs was paying more for medicines than it should.
“If all these taxes are removed, the supplier will also remove them from the patient’s prices, with the overall effect being a huge reduction on costs of medicines on the National Health Insurance Authority (NHIA) bill as well,” he said.
He said the Chamber, for instance, did not understand the rational for paying fees to both the Ghana Standards Authority (GSA) and the Food and Drugs Authority (FDA) at the port of entry, while they both perform the same inspection functions.
Mr Abutiate also noted that it had an issue with the FDA which was demanding a three-year re-registration fees instead of the one year which had been approved by Parliament.
Relief from CET implementation
The Chief Executive Officer of the Chamber of Pharmacy Ghana, Mr Anthony Ameka, said the implementation of the ECOWAS Common External Tariff (CET) had brought a bit of relief to the industry.
He said the harmonisation of taxes in the sub-region had led to the reduction of some taxes but added that the 17.5 per cent VAT was still too high and, therefore, called for its removal.
“It is time for taxes on all imported medicines to be removed,” he said.