The government is set to separate the Health Insurance Fund Levy and the GETFund component from the Value Added Tax (VAT).
These two components will now have straight levies of 2.5 percent.
“Both the Health Insurance Fund and the GETFund levies will continue to be 2.5 percent each, while the applicable VAT rate is 12.5 percent,” the Finance Minister, Ken Ofori Atta said during the Mid Year Budget review on Thursday.
This comes amid the growing concern about financial challenges facing the National Health Insurance Scheme (NHIS).
The National Health Insurance Authority CEO and the Health Minister have consistently warned that the NHIS risks collapsing if financing issues were not addressed.
The GETFund also has a bearing on the infrastructure needs of Senior High Schools amid the increased intake brought on by the Free SHS policy.
Explaining the reasons for the change, Mr. Ofori-Atta said “studies have indicated that current revenue sources do not guarantee the sustainability of the NHIS given that enrollment to the Scheme has increased over the years. The GETFund is also inadequate in the face of an expanding student population and need for additional infrastructure.”
“Mr. Speaker, government is therefore, consolidating contributions to the Health Insurance Fund Levy and the GETFund portion of the VAT into a separate Health and Education Levy. This will enable the Government isolate and increase the budget for health and education,” the Finance Minister said.
This measure was in response to the fiscal performance for the first five months of 2018.
Mr. Ofori-Atta said these measures, among others, are to ensure the government meets its fiscal deficit target of 4.5 percent of GDP.
The government is also imposing a 10 percent luxury vehicle tax on vehicles with a capacity of 3.0 litres and above.
The Personal Income Tax is also to include an additional band of GH¢10,000 and above per month at a rate of 35%.
CBN
