Regulations to abolish 17.5% tax on medicine goes to Parliament this week

Parliament would be presented with a bill this week to abolish the 17.5 percent VAT/NHIL on selected imported medicines, Finance Minister Ken Ofori Atta has announced. The tax on imported medicine was one of the many taxes the New Patriotic Party government captured in the 2017 budgetary statement presented to Parliament in March, which the Finance Minister promised would be abolished. Presenting the 2017 Mid-Year Budget Review to Parliament Monday, the Finance Minister disclosed: “We will be coming back to Parliament this week to lay the Regulations to abolish the 17.5 percent VAT/NHIL on selected imported medicines, which are currently not produced locally.” Earlier, the Minister touted some of the taxes that have been abolished as promised in March. He mentioned the 1 percent Special Import Levy; 17.5 percent VAT/NHIL on financial services; 17.5 percent VAT/NHIL on domestic airline tickets; and also reduced special petroleum tax rate from 17.5 percent to 15 percent. Ken Ofori Atta also stated that government has been able to abolish the 5 percent VAT/NHIL on Real Estate sales; import duty on spare parts, reduced National Electrification Scheme Levy from 5 percent to 3 percent; and reduced Public Lighting Levy from 5 percent to 2 percent. Under the current VAT laws, the import of pharmaceuticals are exempt from VAT if they are listed in a VAT Regulation. In October 2015, a Value Added Tax Regulation, L.I. 2218, was introduced to provide a list of pharmaceuticals that will be exempt from import VAT. A recent Oxford Business Group report shows that although more than 75 percent of pharmaceutical companies in Ghana are locally owned, only 30 percent of the market is covered by local production, with the bulk of drugs imported from India and China.

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Source: | Ghana]]>