Health Insurance Levy Begins In August

The National Health Insurance Levy is to become operational on August 1, 2004. The levy, which will be assessed as 2.5 per cent on the prices of all goods and services, will be collected by the Value Added Tax (VAT) Secretariat.

Proceeds from the levy will be paid into a Health Fund, from which the cost of Health care for Ghanaians will be met. This was announced on Monday during discussions amongst delegates at the plenary session of the National Economic Dialogue in Accra.

Delegates expressed concern that the funds accruing from the levy would be locked up and denied to other areas of the budget that were equally starved of resources. The said that in other countries, the equivalent of the Health Insurance Levy was collected as part of general taxation, which was, therefore, available to fund other government programmes.

They urged the government to consider this option. One school of though believed that the government had to be careful in managing the Health Fund, so that it did not “suffer the fate of the Ghana Education Trust Fund.” They said that since the VAT Secretariat would collect the levy, it was necessary to ensure that “all the loose ends were tied” in order to rope in everybody who was liable to pay the levy.

On the general performance of the economy, the delegates acknowledged that the growth recorded in the economy over the past year was the result of improvements in the cocoa industry. They were of the view, however, that food production had not seen a significant growth. They also called for the accelerated diversification of the economy, saying that over-dependence on cocoa made the economy susceptible to external shocks like fluctuations in world market prices.

The delegates felt that the government's development expenditure should be reflected in the creation of new small-and medium-scale enterprises (SMEs) and in the strengthening of existing ones.