Hon
Members, the item numbered 33.
Motion
Request for Tax Waiver for
Medical Supplies to Support the
Health Sector for 2023-2025
Chairman of the Committee (Mr
Kwaku Agyemang Kwarteng): Mr
Speaker, I beg to move that this
honourable House adopts the Report of
the Finance Committee on the request for
waiver of import duty, import NHIL,
import GETFund levy, import VAT, AU
levy, ECOWAS levy and inspection fees
amounting to the Ghana cedi equivalent
of ninety-nine million, two hundred and
seven thousand, one hundred and
nineteen euros, forty-five cents
(€99,207,119.45 [made up of €64,665,350.52 for Global Fund and GAVI Alliance and €34,551,768.93 for other development partners to the
Ministry of Health]) for medical supplies
including vaccines, medicines,
equipment and vehicles to support the
health sector for the period 2021-2023.
Mr Speaker, I rise to move the Motion
so that the Hon Member for Yapei/Kusawgu and others may eloquently contribute to it. In the process, I present your Committee's Report and request the Hansard Department to capture the entire content while I take the conclusion.
1.0. Introduction
The request for waiver of import duty,
import NHIL, import GETFund levy, import VAT, AU levy, ECOWAS levy and inspection fees amounting to the Ghana cedi equivalent of ninety-nine
million, two hundred and seven thousand, one hundred and nineteen euros and forty-five cents (€99,207,119.45) [made up of €64,665,350.52 for Global Fund and GAVI Alliance and €34,551,768.93 for other Development Partners to the Ministry of Health] for medical supplies including vaccines, medicines, equipment and vehicles to support the health sector for the period 2023-2025 was presented to the House on Friday 17th March, 2023, by the Hon Minister responsible for Parliamentary Affairs, Mr Osei Kyei- Mensah-Bonsu, on behalf of the Minister responsible for Finance.
Pursuant to Order 169 of the Standing
Orders of the House, the request was
referred to the Finance Committee for
consideration and report.
The Committee subsequently met and
considered the request with the Hon
Minister for Health, Mr Kwaku
Agyeman-Manu, Hon Deputy Minister
for Finance, Mrs Abena Osei-Asare and
a team of officials from the Ministries of
Finance and Health as well as the Ghana
Revenue Authority (GRA). The
Committee, hereby, presents this report
to the House pursuant to Order 161(1) of
the Standing Orders of the House.
Background
2.1. The health system is critical for
national development and Government
envisions that the right to health of
people living in Ghana is guaranteed
through an established sustainable health
system which could deliver
comprehensive, affordable, equitable,
responsive health services and easily
accessible healthcare to the population.
Government has made a commitment to
strengthen health promotion and
prevention services by scaling up healthy
lifestyle and disease prevention strategies
as well as improve access to curative and
emergency services.
2.2. Ghana's health sector has over the years achieved positive gains in promoting
the health of the Ghanaian citizenry.
Development Partners in health have
contributed significantly to these gains
but in recent times sustaining the gains
has become very crucial. Their support to
the efforts aimed at eliminating HIV,
malaria and tuberculosis, as well as
ensuring that every child is reached
through immunisation cannot be under-
emphasised.
2.3. The Ministry of Health (MoH) is
responsible for the health of the people
of Ghana. It is involved in providing
public health services, managing
healthcare industry, and building
hospitals and medical education system.
2.4. The health status of people living
in Ghana is improved by the MoH
through the development and
promotion of proactive policies,
provision of universal access to basic
health service, and the provision of
quality and affordable health services
which are delivered in a humane,
efficient, and effective manner by well-
trained, highly motivated and client-
oriented personnel with involvement of
all stakeholders.
2.5. The MoH and its agencies have
specific mandate to assess and monitor
the country's health status, advise central
government on health policies and
legislation, formulate strategies and
design programmes to address health
problems of the country and implement,
monitor, and evaluate (in collaboration
with other related sectors, agencies and
donor partners) all health programmes
and activities in the country.
2.6. As a policy, the MoH is to
maximise the potential healthy life of
individuals resident in Ghana by
reducing the incidence and prevalence of
illness, injury and disability and the
prevention of premature death. It also
seeks to address the health access
inequalities between and within regions
and districts in respect of emergency
care, diseases eradication, elimination,
financing policy and health insurance,
chemotherapy and HIV/AIDS and
quality of care.
2.7. The Government of Ghana and
health sector Development Partners
commit resources towards the
implementation of the health sector
annual programme of work. About 70
per cent of the donor funds are used for
procurement and importation of health
and non-health products including
vaccines, nutritional food supplements
and medicines. For purposes of health
system strengthening, part of the donor
funds is used to procure motor bikes,
bicycles, vehicles, fibre boats, medical
equipment, and service parts.
2.8. Imports of health and non-health
products to the MoH and its related
agencies have high monetary value and
this translates into huge imports bill
which the MoH has inadequate financial
resources to settle. In the Framework
Agreements between the MoH and
Development Partners are clauses
prohibiting implementing actors from
applying cash grants /operational funds
to pay taxes, duties and levies on
imported health and non-health products
as well as VAT component of conference
packages or related costs.
3.0. Purpose of the Request
The objective of the instant request is
to seek Parliamentary approval in
accordance with article 174(2) of the
1992 Constitution for the waiver of the
various taxes and duties in relation to
medical supplies (vaccines, medicines,
equipment and vehicles) to the Ministry
of Health by the Global Fund, GAVI
Alliance and other Development
Partners including JICA, UNICEF,
WAHO, KOICA, WHO etc.
4.0. Total Waiver Requested
The total amount of taxes and duties
for which waiver is being sought is the
Ghana Cedi equivalent of ninety-nine
million, two hundred and seven
thousand, one hundred and nineteen
euros and forty-five cents
(€99,207,119.45) made up of €64,665,350.52 for Global fund and GAVI alliance and €34,551,768.93 for other Development Partners.
5.0. Observations and Recommendations
5.1. Global Fund Investment in Ghana
The Committee noted that the Global
Fund's cumulative investment to Ghana is estimated at US$1.2 billion. The
Government of Ghana (GoG)
represented by the Ministry of Health
(MoH) entered into a Grant Agreement
with the Global Fund to fight AIDS,
tuberculosis, and malaria in December
2021 to implement two programmes - Investing for impact to end Tuberculosis
and HIV and Building effective systems
for impactful malaria control. For the
period 2023-2025, the Global Fund
allocation for the health sector is
estimated at US$238,196,057.00.
5.2. GAVI's Support to Ghana
GAVI has also been an active partner
and provides cash grants and vaccines to
support healthcare delivery in Ghana.
Since year 2000, GAVI has disbursed
cash grants totalling US$42.0 million
and vaccines support totalling US$259.0
million. GAVI's renewed support to Ghana's health sector programme of work for 2021 to 2023 is also estimated
at US$33.0 million cash grant and
US$25,679,258.00 vaccine support.
5.3. Condition Precedent to Health
Commodity Supply
The Committee observed that as a
condition precedent for the supply of
health commodities by these
international partners, the country is
required to provide tax exemptions to
cover the clearing of the commodities at
the ports of entry. An integral part of the
Memorandum of Understanding (MoU)
signed between the MoH, and
Development Partners prohibits the use
of the grant funds for the payment of all
applicable taxes, duties and levies on
commodity imports as well as the use of
cash grants for payment of VAT on
services. Some of the health
commodities such as vaccines and
medicines have limited shelve life which
could affect the potency of the
commodities. Also, any delays in
clearance could result in huge
demurrage/storage and rent charges to
the sector and the Government.
5.4. Need for Waiver
The Committee noted that the
provisions of article 3.5 (Exemption
from Taxation) of the Grant Regulations
(2014) of the Global Fund stipulate that
the Grant Funds shall be exempt from
relevant taxation applicable in the host
country, including but not limited to
customs duties, import duties, taxes or
fiscal charges of equal effect levied or
otherwise imposed on the Health
Products imported into the host country.
Also, article 15 (Taxes) of the
Partnership Framework Agreement for Vaccine and/or Cash Support signed between the Republic of Ghana (represented by the Ministry of Health) and the GAVI Alliance stipulates that GAVI funds provided under the Agreement shall not be used to pay any taxes, customs duties, toll, or other charges imposed on the importation of vaccines and related supplies.
The Committee was informed that the
unlikely failure to grant the instant waiver request could result in the;
i. Possibility of Development Partners withholding support for
these essential commodities.
ii. Cancellation of orders for procurement of the health and non-
health commodities.
iii. Delays in clearance of the commodities, leading to the
reduction in the potency of the
commodities, payment of huge
demurrage/storage and rent
charges.
5.5. Waiver Horizon
The Committee noted that in view of
the agreements between Ghana and the
Global Fund and between Ghana and
GAVI Alliance, the Ministry of Health
has since 2021 been receiving donations
in relation to the relevant programmes
with the expectation that the donations
will continue until the expiration of the
programmes.
The instant tax waiver request hence
covers the donations received from 2021
to date and all subsequent donations to
the health sector until the programmes
end.
5.6. Downward Revision of the Amount to be Waived
The Committee noted that the taxes
and duties requested to be waived
include AU Levy, ECOWAS Levy and
Inspection Fees. The Committee
however was of the opinion that in view
of the provisions of the Exemptions Act,
2022 (Act 1083), those levies and fees
should not be included in the waiver.
The Committee therefore agreed with
the Ministry of Finance to exclude these
levies and fees, and thereby reducing the
waiver amount to the Ghana cedi
equivalent of eighty-nine million, eight
hundred and ninety-two thousand, nine
hundred and forty-six and fifty-seven
cents (€89,892,946.57), made up of €60,372,196.50 for Global fund and
GAVI alliance and €29,520,750.07 for other Development Partners and to
recommend this reduced amount to the
House for approval.
ATTACHMENT: Please find
attached, as APPENDIX, the details of
the revised taxes and duties to be waived
as assessed by the Ghana Revenue
Authority (GRA).
6.0. Conclusion
In view of the foregoing observations
and the critical need for vaccines,
medicines and equipment for the
realisation of health and related
outcomes for the people of Ghana, the
Committee respectfully recommends to
the House to adopt this report and
approve by resolution, the request for
waiver of import duty, import NHIL,
import GETFund levy and import VAT
amounting to the Ghana cedi equivalent
of eighty-nine million, eight hundred and
ninety-two thousand, nine hundred and
forty-six euros and fifty-seven cents
(€89,892,946.57 [made up of €60,372,196.50 for Global Fund and GAVI Alliance and €29,520,750.07 for other Development Partners to the
Ministry of Health]) for medical supplies
including vaccines, medicines,
equipment and vehicles to support the
health sector for the period 2023-2025 in accordance with article 174(2) of the
1992 Constitution of the Republic of
Ghana.
Filed copy of Finance Committee.