Tax Exemptions For Local Pharmaceuticals
LOCAL PHARMACEUTICAL companies will soon enjoy exemption from the payment of Value Added Tax (VAT) to reduce the cost of drugs and make them competitive.
This follows a motion moved yesterday in Parliament by Dr. Anthony Osei Akoto, Minister of State at the Ministry Finance and Economic Planning for the amendment of some sections of the VAT Act 1998 (Act 546).
It is expected to expand the list of VAT-exempted pharmaceutical raw materials from 34 to 66.
According to Dr. Akoto, the proposed exemption list is intended to encourage the manufacture of very vital drugs for chronic and acute health conditions. Some of these include severe infections, hypertension, diabetes, epilepsy, asthma, malaria, pregnancy and other related common but serious complications usually experienced at the country's health facilities.
The minister, who is also the Member of Parliament (MP) for Old Tafo, noted that the move will increase the capacity of local companies which produce 9 percent of the drugs in circulation (representing only about 30-40 percent potential capacity) to produce essential drugs for domestic use.
Sixty-six special imported drugs have also been selected for exemption from VAT, which includes drugs that are widely used for treating the 10 top causes of morbidity and mortality in the country. These include life-saving drugs such as anti-snake venom serum, anti-rabies vaccine, anti-shock drugs and drugs for tuberculosis, HIV/AIDS and guinea worm among others as well as drugs for the management of public health diseases.
Meanwhile, Hon. Hackman Owusu-Agyemang, MP for New Juaben North, has urged the Ministry of Finance and Economic Planning to monitor the activities of the local pharmaceutical companies in order to ensure that the tax exemptions benefit the poor.
Mr. Owusu-Agyemang, whose submissions were supported by the MP for Wa West, Joseph Yieleh Chireh, added that it is important to also check the quality of drugs being manufactured locally or imported to ensure the health of the people.
In another development, Dr. Akoto also moved the motion for the Stamp Duty (Amendment) Bill to amend Stamp Duty Act, 2005 (Act 689) with a view to correcting some errors contained in the Act. While some of these are typographical, others are fundamental. The foregoing, he said, negatively affects revenue generation.
A Stamp Duty is basically a tax on documents, and not a tax on individuals, companies, activities or transactions.
By Awudu Mahama